Latest / Leaders in Customer Loyalty, Powered by Loyalty360 / #513: Leaders in Customer Loyalty: Supplier Voices | Loyalty’s Intelligence Era: How Partnerships, Data Context, and Emotional Relevance Are Redefining Customer Loyalty for 2026

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#513: Leaders in Customer Loyalty: Supplier Voices | Loyalty’s Intelligence Era: How Partnerships, Data Context, and Emotional Relevance Are Redefining Customer Loyalty for 2026 · Leaders in Customer Loyalty, Powered by Loyalty360

• 0:04
  SPEAKER_01: Hi everyone, this is A.J.
• 0:06
  SPEAKER_01: Schneider from Loyalty360, welcoming you to another edition of our Leaders in Customer Loyalty Industry Voices podcast.
• 0:12
  SPEAKER_01: In these episodes, we talk to the leading agencies, technology partners, and consultants in brand loyalty about the technology trends and best practices driving unique experiences, engagement, and ultimately customer loyalty.
• 0:24
  SPEAKER_01: This episode is part of our 2026 trend series where we're talking about what patterns and best practices we're likely to see in the upcoming year.
• 0:32
  SPEAKER_01: Today we're speaking with Sean Classen, Executive Vice President of Innovation and Chief Strategy Officer at Bond Brand Loyalty, a global customer experience and loyalty consultancy that helps brands design, build, and manage programs that deepen emotional connections and drive long-term customer value.
• 0:48
  SPEAKER_01: Sean, welcome.
• 0:49
  SPEAKER_01: Thanks for joining us.
• 0:50
  SPEAKER_00: Hey Jay, nice to see you.
• 0:51
  SPEAKER_00: Thanks for uh thanks for having me.
• 0:53
  SPEAKER_01: Absolutely.
• 0:54
  SPEAKER_01: Well, as you know, um this uh is one of our kind of look back at 2025 podcasts and and uh you know uh sets us up for talking about trends that that we might see in loyalty as we move into uh 2026.
• 1:11
  SPEAKER_01: Um and so I wanted to start with that look back and just you know kind of pick your brain a little bit.
• 1:17
  SPEAKER_01: What do you think the kind of the emerging consumer behaviors uh obviously, and there's a lot that drives that with the economy and and you know, social media, all kinds of different things that that affect how people um you know interact with with different brands.
• 1:32
  SPEAKER_01: But what do you think the the primary things were that that affected loyalty strategies in 2025?
• 1:39
  SPEAKER_00: Yeah, I mean, 2025 was maybe an exclamation mark on uh the proliferation of loyalty programs.
• 1:45
  SPEAKER_00: You know, it's crowdy out there.
• 1:47
  SPEAKER_00: Uh every everybody's got one or they're in the process of of finally standing one up.
• 1:53
  SPEAKER_00: And I think our contention was sort of like we may have hit peak loyalty in 25.
• 1:59
  SPEAKER_00: And so if that's true, and then all the legacy programs that have been in market for a while, you know, they were in there before the pandemic, they they thrived through the pandemic and whatnot, all their penetration rates are like way up, right?
• 2:11
  SPEAKER_00: So nobody's no nobody's sort of bumbling around in a mature program with like 20, 30% penetration.
• 2:17
  SPEAKER_00: They're at 65 plus, you know, depending on your industry, grocery and stuff like that, you might be 90% uh penetrated.
• 2:25
  SPEAKER_00: And so with with some of that progress behind us in 25, I think um this loyalty is has been asked all the way through 25 to do more.
• 2:35
  SPEAKER_00: And I think that's only going to accelerate as we go into 26 and and beyond.
• 2:40
  SPEAKER_00: So that that's probably like a bit of a market condition that that has changed.
• 2:46
  SPEAKER_00: I think um with some of the consumer behavior that we saw a few years ago where this like K-shaped economy started to form, you had like really great customers, and then you had a lot of customers who were using loyalty, you know, as a bit of an offset to their cost of living.
• 3:03
  SPEAKER_00: You know, they might have been finally using some of the equity that they had stored up in in legacy programs and whatnot.
• 3:09
  SPEAKER_00: Um, designing for those things is different than it was, you know, even a few years ago.
• 3:15
  SPEAKER_00: And so um I think that's like a consumer behavior change, and it is kind of a market condition at the same time.
• 3:24
  SPEAKER_00: And then I think um we've just seen this like voracious appetite for partnerships in 25.
• 3:31
  SPEAKER_00: You could maybe even think of it as a land grab.
• 3:33
  SPEAKER_00: Everybody kind of went out and tried to find dance partners, you know, before the music stopped and and there were no chairs left in that game of musical chairs.
• 3:41
  SPEAKER_00: Some of those partnerships went really, really well.
• 3:44
  SPEAKER_00: Some of those partnerships were awkward and uh and people uh spent a year or two finding their way through it.
• 3:50
  SPEAKER_00: 25 saw as many new partnerships, I think, as renewals, as divorces and breakups.
• 3:57
  SPEAKER_00: And so, you know, the loyalty industry is a bit of a mixed bag on that front.
• 4:02
  SPEAKER_00: I know that from a consumer behavior perspective, like awareness of those partnerships is up.
• 4:07
  SPEAKER_00: I think probably somewhere north of 60%.
• 4:10
  SPEAKER_00: And if you are aware, participation is up, something like 80%.
• 4:16
  SPEAKER_00: But I'm not sure that satisfaction has risen with those other two metrics quite the same way.
• 4:22
  SPEAKER_00: So 25 was a good year of progress for partnerships and the networking of the loyalty sort of layer of every brand.
• 4:30
  SPEAKER_00: But I think 26 is going to be some calibration and some fine-tuning and a lot more uh work on that front.
• 4:37
  SPEAKER_00: And then if there was a third, um there's there's just a lot of fragmentation going on for brands.
• 4:46
  SPEAKER_00: Like we've all been chasing this omni experience for decades, uh, except the definition of omni keeps changing because now you've got brands who are selling themselves and they're also selling on Amazon, they're in other sort of marketplaces and things like that.
• 5:01
  SPEAKER_00: You've got agentic commerce sort of creating a new intermediary between you as a brand and your customer.
• 5:09
  SPEAKER_00: And so there's just like there's more lanes uh that have opened up in the last uh couple of years.
• 5:14
  SPEAKER_00: 25 saw a lot of both announcements and people, you know, trial that stuff.
• 5:19
  SPEAKER_00: And I think, you know, it makes for some spotty self-IDing.
• 5:24
  SPEAKER_00: So the the very foundational data is a little bit shaky in some industries because of that.
• 5:29
  SPEAKER_00: There's a diffusion of the signals that brands used to be getting out of their loyalty programs because now I might be off in Amazon buying and that's not really connected to the loyalty program with my brand.
• 5:40
  SPEAKER_00: And so, you know, there's some headwinds uh going into 26, but the the glass half full optimist in me says, you know, that also makes a lot of opportunity for brands.
• 5:51
  SPEAKER_00: Things are just way more competitive, and that's the nature of the beast.
• 5:55
  SPEAKER_01: No, that's really interesting.
• 5:57
  SPEAKER_01: And I think you set up the kind of the next set of questions um really well.
• 6:02
  SPEAKER_01: Let me let me go back to the idea that where you started, where uh consumers are are looking at loyalty progress uh programs to to sort of um help offset some of their costs, right?
• 6:19
  SPEAKER_01: And and you know, that's not that you know that maybe that's a brand new concept, but because of the environmental issues going on, that seem you know, they're they're really being pressed.
• 6:32
  SPEAKER_01: Um can you talk a little bit more, maybe a little bit more detail about how you see programs actually, you know, taking advantage of that and saying, look, we're gonna we're gonna kind of play to that um to sort of get more deeply involved with with the customer because now they're seeing it as you know not just a a nice perk and and a way to keep them engaged, but they're using it almost because they have to.
• 6:54
  SPEAKER_00: Yeah.
• 6:55
  SPEAKER_00: I mean, you know, this will differ a little bit by categories.
• 6:58
  SPEAKER_00: Some of the high-end fashion brands will feel this differently than like a grosser and and their programs.
• 7:05
  SPEAKER_00: I think for a period of time we saw this rush for more tangible, probably financially oriented reward um mixes, like a lot more cash back and a lot more uh easier to obtain things down at if if it's a tiered program, like down at a lower tier.
• 7:24
  SPEAKER_00: And and that I think was um a response to consumers feeling like, I don't know what tomorrow looks like.
• 7:30
  SPEAKER_00: I, you know, I can't strive for that like big aspirational thing.
• 7:33
  SPEAKER_00: I need, I need something right now.
• 7:36
  SPEAKER_00: And, you know, payment programs that tied to like credit cards and things like that, they responded really quickly to some of that stuff.
• 7:43
  SPEAKER_00: A lot of the everyday spend categories responded pretty quickly to that.
• 7:47
  SPEAKER_00: Um lots of people had to re-jig their tiers.
• 7:52
  SPEAKER_00: And, you know, whether it's the thresholds between the breaks or it's exactly what's in some of those tiers on the redemption side of the equation in order to satisfy, you know, that consumer desire to just get something tactile, tangible, you know, meaningful in my in my day-to-day life.
• 8:10
  SPEAKER_00: And I think, you know, if that was you know true coming into 25 as we came out of it, you know, there's no there's no shortage of dynamic uncertainty and instability in the sort of macro environment.
• 8:25
  SPEAKER_00: And so I think that will still happen.
• 8:27
  SPEAKER_00: But to my K-shaped comment earlier, I think marketers are beginning to realize, brands are beginning to realize I might have like two vastly different, wildly different customer cohorts here.
• 8:40
  SPEAKER_00: I've got people who are looking for that like easy to obtain bit of a break on the next transaction kind of piece.
• 8:49
  SPEAKER_00: And at the same time, uh, those same customers, maybe in different categories, are like, I'm good for the big aspirational reward.
• 8:58
  SPEAKER_00: I just want to feel something different.
• 9:01
  SPEAKER_00: And so like I'll go for that, you know, more experiential, more um highbrow type of experience reward.
• 9:10
  SPEAKER_00: And I think like both are true.
• 9:12
  SPEAKER_00: You know, I might be trading down at the grocery store to a house label and saving like hell to go to Disney with the kids.
• 9:19
  SPEAKER_00: And, you know, one is wickedly expensive, and the other is just trying to make sure that like, you know, dinner doesn't cost more than it than it needs to.
• 9:27
  SPEAKER_00: And and I think cohorts of customers are are a mixed bag, right?
• 9:33
  SPEAKER_00: I think we want to marketers have this tendency to like put people in sort of perfectly mutually exclusive buckets.
• 9:39
  SPEAKER_00: I think, you know, human beings are complicated.
• 9:42
  SPEAKER_00: And uh and thankfully now we have a lot of the tool sets to be able to apply that complicated set of um context uh and not just like basic rule systems, like if this, then that, you know, Pavlovian style.
• 9:57
  SPEAKER_01: And and I assume that that maybe underlying both of those types of customers is sort of increased pressure on the whole time to value issue.
• 10:07
  SPEAKER_01: I mean, whether you're saving up for the big trip to Disney uh uh world or something you know smaller, um everybody seems to want to get there quicker, right?
• 10:19
  SPEAKER_01: It seems like an obvious statement.
• 10:20
  SPEAKER_01: But is that are you seeing that as well?
• 10:22
  SPEAKER_00: That's totally true.
• 10:23
  SPEAKER_00: And you know what?
• 10:24
  SPEAKER_00: This is maybe another dynamic that that really uh masticized, I think, in 2025.
• 10:30
  SPEAKER_00: All the airlines had to, you know, pretty significantly retool, right?
• 10:35
  SPEAKER_00: The lounges are overrun because everybody took the credit cards and there were all these ways to earn when we couldn't fly.
• 10:40
  SPEAKER_00: And it just, you know, kind of ground that system to a halt.
• 10:43
  SPEAKER_00: I remember walking by an airline lounge and there was like three lineups, and it was like the super elites, you line up here, and there's only like eight people in front of you.
• 10:53
  SPEAKER_00: And then the next line is for sort of the middle of the road members.
• 10:56
  SPEAKER_00: Um, and then this other line is like no hope in hell, maybe you're just starting out in the program.
• 11:01
  SPEAKER_00: But they're all looking at each other, and I'm looking at it going, this is perverting the whole thing.
• 11:06
  SPEAKER_00: So you're telling these people who are just starting out that the best they're gonna do is wait in that line before they can get into the lounge.
• 11:15
  SPEAKER_00: Like that, I'm gonna go have a burger at the restaurant down the down the concourse.
• 11:20
  SPEAKER_00: That I'm not gonna stand in any of these lines.
• 11:22
  SPEAKER_00: And I think like because the airline programs are so pervasive in the marketplace, in the US in particular, um, what they do well or not has an undue level of influence on the rest of the loyalty topic, like what I expect at the grocery store or what I expect in some of these other places.
• 11:42
  SPEAKER_00: And so I think 25, that time to value, and everybody wanting to like cut the line and get there faster and whatnot, um, you know, maybe, maybe took us a little bit of a step back to have to retool the tiers and the other earning structures and whatnot.
• 11:58
  SPEAKER_00: And um, I think it had a semi-destabilizing effect on a lot of loyalty programs, on just people's expectations.
• 12:04
  SPEAKER_00: Like, I don't even know if I can get in the lounge.
• 12:06
  SPEAKER_00: So I'm not, I'm not even gonna, I'm not even gonna line up.
• 12:09
  SPEAKER_00: And and that's that's a, I would say that's a dangerous place for the loyalty industry to be, because when you sort of destroy that belief that it's worth it, you know, I think a lot of other bricks come out of that wall fast.
• 12:24
  SPEAKER_01: And and I I'm I'm gonna guess that that starts to answer what my next question was to be about sort of strategy and and and as uh brands kind of think through what their strategy is gonna be, they're they're looking at exactly what you just described.
• 12:37
  SPEAKER_01: And it and and that has to be driving um what's gonna be the successful loyalty models going forward versus the ones that are are gonna struggle if they haven't made that um that sort of adaptation to the way people are feeling and and what they want.
• 12:52
  SPEAKER_00: Yeah, I'd say that's true.
• 12:53
  SPEAKER_00: I mean, you know, because we're sitting on a lot of intelligence, right?
• 12:58
  SPEAKER_00: We we're we're tapped into um, you know, hundreds of thousands of people's opinions about how they participate in these programs, which we've we've published for a lot of years in the loyalty report.
• 13:10
  SPEAKER_00: But we're also sitting on, you know, 10 million consumer wallets full of cards and all the transactions across all the networks plus debit, et cetera.
• 13:18
  SPEAKER_00: And so we're watching the difference between what people say and what they're doing.
• 13:24
  SPEAKER_00: And then if you check out, you know, some of the other we've got some like app IQ data, we call it, just like what people are engaging with on their phones or not, you know, how much, et cetera, and what those overlaps look like.
• 13:35
  SPEAKER_00: When you put all the composite of that intelligence together from a strategy and design perspective, as brands try and figure out then, like, how do I design for the future and kind of future-proof from myself from a version of this situation that we just went through?
• 13:52
  SPEAKER_00: I think that there is like just more intelligent mechanics to be had.
• 13:56
  SPEAKER_00: Um, maybe in the past it was a failure of imagination.
• 14:00
  SPEAKER_00: Maybe we just didn't have the circumstances that required it.
• 14:03
  SPEAKER_00: But when you publish a benefit, like I gotta, there's a seasonal reward, you can still stratify that benefit.
• 14:13
  SPEAKER_00: You don't have to make a perfectly stratified, simplified program published out to the marketplace and just go like bronze people get this, and silver people get that, and gold people get this.
• 14:25
  SPEAKER_00: In any one of those things, you can create a little bit of stratification behind the scenes that's not published, so that the brand has a bit more latitude on sort of how much the program costs them, how much value they're giving to which kinds of customer cohorts, in a way that like doesn't need these massive redesigns every couple, few years because the economics have changed significantly.
• 14:49
  SPEAKER_00: And so I think the new, smarter, more intelligent design work that's getting done when we're with our clients is about figuring out where's that line, what's published, what's not published, how much variability is there behind the scenes, behind the curtain.
• 15:04
  SPEAKER_00: So much that the customer still knows what they're getting and that that feels valuable, but you've got a little bit more control.
• 15:11
  SPEAKER_00: Um, and I think you know, the systems and the technology that's in market now versus 10 years ago, like it can handle that kind of complexity.
• 15:21
  SPEAKER_00: And uh there's a lot more um variability that we can operationalize.
• 15:26
  SPEAKER_00: You know, it's people we have our hands in these programs, we're operating them, we're accountable to the SLAs.
• 15:32
  SPEAKER_00: So we're not up here in some ivory tower designing the right structure and hoping, you know, that it materializes the way that we uh intended uh once it's executed.
• 15:43
  SPEAKER_00: Making sure that there's no daylight between those things, I think, is what marketers have to do now is uh the kind of protection that they have from a future that has a lot of volatility and a lot of uncertainty in the in the core economics even of their business.
• 16:00
  SPEAKER_01: Are are there some particular um advancements and and innovations that you know over the last well, let's I'll give it 18 months that that that are helping that process that you just described um today that are available that weren't available you know two years ago or whatever?
• 16:20
  SPEAKER_00: Yeah, some of it will be wasn't available and is now, some of it will be was available but wasn't known and is now known.
• 16:28
  SPEAKER_00: I think a lot of the work that we've done in that area of of like engagement and loyalty intelligence for a few years, we've been assembling a lot of you know these kinds of data sources that can help customers, clients of ours figure out who's actually loyal.
• 16:45
  SPEAKER_00: So, you know, AJ looks like one of my best customers.
• 16:49
  SPEAKER_00: Uh what I don't know is he's got 12 other occasions in my category that go to my arch nemesis.
• 16:56
  SPEAKER_00: You know, the loyalty program historically, or even CRM, anything in your walled garden, only looks at what I see AJ do with me.
• 17:06
  SPEAKER_00: And we were like, but there's this whole other data source where you can understand, like, you can look around that corner, you can figure out like, is AJ truly loyal, or does he just look mechanically participatorily loyal in your program?
• 17:19
  SPEAKER_00: And those two things might be the same, but they might be different.
• 17:23
  SPEAKER_00: And so I think, you know, as the data has become more um more widely known to exist, number one, more available for interrogation, and then more usable inside the Martex stacks, whether that's a classic loyalty program or it's CRM or something else, I think that has progressed quite a bit in the last 18 to 24 months with the clients that we're working with, you know, 18 to 24 months ago, they would have been like, hmm, that's half- that's interesting.
• 17:53
  SPEAKER_00: We'd have a lot of like infotainment-based discussions.
• 17:57
  SPEAKER_00: And then, you know, it got to a place where they were like, okay, what if I pipe this into my systems?
• 18:03
  SPEAKER_00: Like, can I can I pick up a flag, append it to an actual member record, and then like build a journey off of it or build a trigger off of it or something like that?
• 18:14
  SPEAKER_00: That's where we are now.
• 18:15
  SPEAKER_00: And so I think some of the most progressive brands are taking that data, you know, more contextual information about the customer and piping it into those kinds of systems.
• 18:26
  SPEAKER_01: And and not to get into too many details of that, but but where is that data coming from?
• 18:32
  SPEAKER_01: Is it, I mean, some of it might, I assume, might be simply asking.
• 18:36
  SPEAKER_01: Um, I don't know if customers are gonna be willing to say that they all they, you know, yes, I did business with you, but I also did business with with a competitor, or you know, is that a source of the data, or where else is it coming from?
• 18:48
  SPEAKER_00: Yeah, there's there's probably three good sources.
• 18:50
  SPEAKER_00: And the first one is the one you said, zero party data, you know, like what is um what is the sentiment of this customer?
• 18:58
  SPEAKER_00: What attributes will they volunteer to me?
• 19:00
  SPEAKER_00: You know, how can I understand just from like even even think about the way that like GPT knows a lot about you just from the chats that you've had, you know, that data previously would have been in some first generation chat bot on a retailer's website, and like it just would have evaporated.
• 19:18
  SPEAKER_00: It wasn't in a logged in state, it wasn't attached to AJ's record, nobody was like analyzing it to pull out, oh, busy dad doing these things, going here, going there.
• 19:28
  SPEAKER_00: That's all available now.
• 19:29
  SPEAKER_00: So from a zero party, Waimar.
• 19:32
  SPEAKER_00: On a first party basis, I think brands have just they've done most of them, not all of them, and not everybody's done their homework, but most of them started getting, you know, a single view of customer all in one place, all the interaction points, et cetera.
• 19:48
  SPEAKER_00: Good housekeeping, good work to do.
• 19:50
  SPEAKER_00: But the most interesting data, I think, has been the third-party data that we've been able to sort of bring to the party.
• 19:58
  SPEAKER_00: And that the sources of that data would be a handful of um aggregators uh of the of the like app interaction data, for example.
• 20:08
  SPEAKER_00: There's uh providers in the marketplace who can uh give that data down at a unique individual customer level.
• 20:16
  SPEAKER_00: Um they can give it with enough demographic information that it can be matched, you know, in a high likelihood to your customer base and their activities.
• 20:25
  SPEAKER_00: There is wallet data, like the financial aggregators, the fintechs, a lot of brands in that space have secured the rights from customers, full disclosure to say, you know, if I can make your experience better or if I reward you for this, are you willing to share card data?
• 20:44
  SPEAKER_00: Are you willing to share an inbox?
• 20:46
  SPEAKER_00: Are you willing to share an account credential to Walmart or Target or whatever in trade for this other benefit?
• 20:54
  SPEAKER_00: And when they do that, that data can now be um understood and appended, matched or or otherwise to an individual customer record at any brand.
• 21:07
  SPEAKER_00: And so that third party data source, as we've been sort of mixing zero, first, and third to get like a rounder picture of the customer, that's where a lot of those unlocks come from.
• 21:20
  SPEAKER_00: You know, because a lot of a lot of brands have a lot of first party data.
• 21:23
  SPEAKER_00: In fact, they would say, I have more first party data than I'm even able to use.
• 21:27
  SPEAKER_00: We would contend, and 18, 24 months ago, we were certainly contending.
• 21:32
  SPEAKER_00: Sometimes you've got like nine out of the ten ingredients you need to make a really great dish.
• 21:39
  SPEAKER_00: So you've got the nine and you're not even sure how to use all of them.
• 21:42
  SPEAKER_00: But without this one, I'll I'll pick on share of wallet, AJ has as much spend at your Arch Nemesis competitor as he has with you.
• 21:52
  SPEAKER_00: So if you think you're done the work on AJ, you are not.
• 21:56
  SPEAKER_00: And I think like that kind of eye opening conversation.
• 22:00
  SPEAKER_00: Customer context is something that feels, you know, like a relatively new territory for a lot of brands.
• 22:05
  SPEAKER_00: So those sources are available.
• 22:08
  SPEAKER_00: We've been cleansing and amalgamating that data for years and in the last 18, 24 months, started putting it to use in the actual systems so that it's not just good PowerPoint or a nice dashboard.
• 22:21
  SPEAKER_00: It's data through API into systems that can execute on it.
• 22:27
  SPEAKER_01: Yeah, and and I and I'm probably, I said I wasn't gonna get into the details, I'm probably getting a little off track here, but but you you mentioned you know the idea that that if customers are presented with the idea that if they share certain information, it you know, they're promised a potentially you know better experience.
• 22:46
  SPEAKER_01: Yeah.
• 22:47
  SPEAKER_01: Is as time goes on, have people become more likely to be okay sharing that data?
• 22:56
  SPEAKER_01: Yeah, I mean there's this whole privacy thing, you know, for a while it you know, it was almost the opposite where people are like, no, no, no, no, I'm not, I'm I'm definitely not checking that box, right?
• 23:06
  SPEAKER_01: But it but it does to your point, it does seem I maybe my own uh you know experience.
• 23:12
  SPEAKER_01: I I'm I'm I'm sort of fast and loose with it nowadays.
• 23:15
  SPEAKER_01: I don't care.
• 23:15
  SPEAKER_01: Yeah, you could check it.
• 23:16
  SPEAKER_00: You know, is that not working?
• 23:18
  SPEAKER_00: I'm not working for the CIA.
• 23:19
  SPEAKER_00: You can have a look at what's that thing for sure.
• 23:21
  SPEAKER_00: Um the answer is yes, but I'm gonna put a I'm gonna put an asterisk on it, okay?
• 23:26
  SPEAKER_00: So the the we used to track this thing called the the cool to creepy line, right?
• 23:30
  SPEAKER_00: There was there was a place where like customers were like, yep, yep, yep, yep, yep.
• 23:34
  SPEAKER_00: No, whoa, whoa, whoa.
• 23:35
  SPEAKER_00: That line has moved.
• 23:37
  SPEAKER_00: Like I think on mass, that line has moved.
• 23:40
  SPEAKER_00: Some of it is generational and cohort related, but some of it isn't.
• 23:45
  SPEAKER_00: Some of it is just, I think brands got better about articulating like what they were able to do with it to provide value.
• 23:53
  SPEAKER_00: And they were able to get more transparent about that articulation.
• 23:58
  SPEAKER_00: And I think there was a there was a time that you were referencing where like we could as marketers, but we didn't think that we had to be so transparently articulate about what value it was going to provide, because it was just sitting there.
• 24:13
  SPEAKER_00: It was like data exhaust that we were just trying to capture.
• 24:17
  SPEAKER_00: And I think what has also changed is a brand's maybe more inherent responsibility in the last five, 10 years to make sure that like they're putting that data to good use, that that uh has real material value back in the hands of the customer.
• 24:37
  SPEAKER_00: Because when it doesn't, under any threat, the customer can pull this back, these permissions back at any time.
• 24:43
  SPEAKER_00: And so I think like both the line has moved from a consumer perspective, and I would contend that you know, the right brands who are who are more advanced and doing this kind of stuff, they've gotten more clear-eyed about what it means to be transparent about the value exchange that's attached with that greater sharing.
• 25:02
  SPEAKER_00: And so everybody's sort of on the up and up.
• 25:05
  SPEAKER_00: If you think way back to Cambridge Analytica, we were all trading the utility of Facebook for the data that we were, that we were giving.
• 25:15
  SPEAKER_00: Except the value exchange got so sort of pushed out of sight and you know, moved to the background that it became like wallpaper and everybody forgot that they were trading something.
• 25:27
  SPEAKER_00: I think the beauty of like a loyalty program or a more overt opt-in through CRM messaging and whatnot, it just inoculates you from that getting forgotten.
• 25:39
  SPEAKER_00: It it's so overt, it's so transparent.
• 25:41
  SPEAKER_00: And if you don't want to participate, you just you just stop self-IDing, you stop participating.
• 25:46
  SPEAKER_00: I think that those two things have maybe converged as we go into 2026.
• 25:52
  SPEAKER_00: I think like it's prime to take right off.
• 25:56
  SPEAKER_01: Yeah, yeah, fascinating.
• 25:58
  SPEAKER_01: Let me let me switch gears on you a little bit and and talk about you know another um aspect of loyalty programs that's that that's sort of continuing to get a lot of attention.
• 26:08
  SPEAKER_01: So, you know, we we referenced um early on kind of the you know, the the the environmental changes that that customers are are finding themselves in and that they want different things from their loyalty programs, perhaps than they used to in different timing and so on.
• 26:25
  SPEAKER_01: The other piece is that they seem we we we seem to want to go back to a more um touchy-feely um uh uh time as well, and that emotional loyalty is really becoming um a much sort of more important part of of the program.
• 26:45
  SPEAKER_01: Yeah.
• 26:45
  SPEAKER_01: Um are you seeing that as well?
• 26:48
  SPEAKER_01: And and and that your clients and and brands are are sort of really trying to operationalize emotional loyalty as part of their their programs moving forward?
• 27:00
  SPEAKER_00: Yeah, they are.
• 27:01
  SPEAKER_00: Here's my guardrail.
• 27:03
  SPEAKER_00: I think with the I think the the like the nostalgia for like actually being recognized and cared about and all of those things, those are true.
• 27:10
  SPEAKER_00: Customers tell us that in spades as we talk to hundreds of thousands of them a year about the relationships that they have with brands, right?
• 27:20
  SPEAKER_00: What I think um, you know, maybe threatened this this direction of travel in the loyalty industry was at some point it got kind of too touchy-feely and too untethered from the ground.
• 27:33
  SPEAKER_00: And it it missed the line of attribution to something that still matters from a business perspective.
• 27:39
  SPEAKER_00: So you had a lot of like things that looked like emotional loyalty, or they uh they were highly emotional experiences and whatnot, but you like couldn't do them at scale.
• 27:49
  SPEAKER_00: So it never really made a dent in the business.
• 27:51
  SPEAKER_00: Like there were all these other sort of catches to that stuff.
• 27:55
  SPEAKER_00: As we've worked with Forester, um, you know, who would who would give us high marks on measuring emotional loyalty, putting that emotional loyalty into practice and in into tactical componentry that's in your loyalty program or just as stitched into the customer experience of your brand, that trick needs a bit of a guardrail.
• 28:18
  SPEAKER_00: That needs a very clear-eyed view of which kind of KPIs are related to others as knock-on gain and not like a well, I'll only be able to see this KPI go up, and I hope that this other one will go up with it as well.
• 28:36
  SPEAKER_00: I'm hope is not a good strategy.
• 28:38
  SPEAKER_00: I'm not a fan.
• 28:40
  SPEAKER_00: Um, and so I think just like more rigor around understanding which of those emotions are truly driving things like additional uh time spent in app, the degree to which conversion goes up, how those baskets look, uh, how many friends get actually referred.
• 29:02
  SPEAKER_00: I love NPS as much as the next guy, but there's something about it that always seems a little fictional to me.
• 29:07
  SPEAKER_00: Like, would you conceivably recommend this brand to a friend?
• 29:11
  SPEAKER_00: How about did you?
• 29:13
  SPEAKER_00: How many did you?
• 29:15
  SPEAKER_00: Like, that's the kind of data you Tesla can see.
• 29:18
  SPEAKER_00: They don't, they don't, they don't ask you NPS.
• 29:20
  SPEAKER_00: They're like, I can see whether you refer to people or you did not.
• 29:24
  SPEAKER_00: And I think all that scoring now is easier to wield with some of the like AI tech, some of the like automation.
• 29:34
  SPEAKER_00: We can get at that inhuman scale thing to add really human emotional components to the program.
• 29:42
  SPEAKER_00: I often find that I'm having to say to clients, just like, be careful you're not rewarding for a thing you should just be recognizing.
• 29:49
  SPEAKER_00: Right.
• 29:49
  SPEAKER_00: Sometimes AJ just wants to know, like, I see you.
• 29:52
  SPEAKER_00: I see you.
• 29:53
  SPEAKER_00: Thank you.
• 29:54
  SPEAKER_00: Don't like go, and here's a glut of points, or like, here's a discount, or you know, some kind of clumsy mechanic like that.
• 30:00
  SPEAKER_00: And I think we've outgrown the the programs that step away from their competitors, they've outgrown some of that mechanical loyalty stuff without losing the tether to the outcome.
• 30:14
  SPEAKER_01: Yeah.
• 30:14
  SPEAKER_01: Yeah.
• 30:15
  SPEAKER_01: I I it's an interesting point.
• 30:16
  SPEAKER_01: It's it's um it's kind of knowing when you've gone too far almost.
• 30:22
  SPEAKER_00: Yeah.
• 30:23
  SPEAKER_00: And just be be mindful that like the hip bone needs to be connected to the knee bone, needs to be connected to the ankle.
• 30:30
  SPEAKER_00: You know what I mean?
• 30:30
  SPEAKER_00: Like you you you can't fully untether these things and just like hope for the best because it looks emotional, feels emotional, or creates a beautiful 30-second emotional thing you're gonna throw up on TikTok.
• 30:43
  SPEAKER_00: That's not not good enough.
• 30:45
  SPEAKER_00: Necessary, not sufficient.
• 30:48
  SPEAKER_01: And and at the same time that that's going on, um, we've got this sort of uh tsunami of of you know um AI implementation, right?
• 31:01
  SPEAKER_01: That that affects, you know, personalization and and and the types of things that you know we're providing individually to do to the customers as part of a program.
• 31:13
  SPEAKER_01: And and it strikes me that there's a that there's a a bit of a um a dichotomy there between what we were just talking about on the emotional loyalty side or a potential dichotomy and and and what we're doing with AI, which depending on how intelligent it is, may be able to provide an emotional experience or you know, an emotional piece of content.
• 31:34
  SPEAKER_01: Um, I don't know if we're there yet or not, but you know, what what are the use cases for AI that you're seeing that are helping with that process?
• 31:45
  SPEAKER_01: And and in fact, do they interact?
• 31:47
  SPEAKER_01: Is that part of it, you know, does that play into the emotional piece of it or are they still two separate things?
• 31:52
  SPEAKER_00: Yeah, I think, okay, so there's a lot in that question.
• 31:55
  SPEAKER_00: Let me try and unpack a little bit.
• 31:57
  SPEAKER_00: So I think that um those two things don't have to be at odds, or that it doesn't have to be so sort of binary.
• 32:05
  SPEAKER_00: The the promise, like the the core promise of a bunch of this, uh whichever flavor of AI you're anyone's referring to, the promise is you can put sort of the human level scale.
• 32:17
  SPEAKER_00: I see you, AJ.
• 32:18
  SPEAKER_00: How was that shovel I sold you yesterday?
• 32:20
  SPEAKER_00: It looks like your back is sore.
• 32:22
  SPEAKER_00: Do you need a wheelbarrow?
• 32:23
  SPEAKER_00: Like good personalization at scale.
• 32:26
  SPEAKER_00: That promise is is good and fine.
• 32:28
  SPEAKER_00: And there'll be some first mover advantages on people who like take that tech and put it into practice faster than their conf set.
• 32:38
  SPEAKER_00: But my my my provocation is um you're all gonna rush to the same place.
• 32:47
  SPEAKER_00: And if you're all using the same kind of AI tech and you're doing it off of relatively similar data that you're each sitting on because your programs look like each other, cookie cutter, blah, blah, blah, I would contend you're all just gonna get back to the same parody place again.
• 33:07
  SPEAKER_00: And so a lot of the instigation that we're doing with clients these days is identifying like, what's the data source you're feeding the robots?
• 33:17
  SPEAKER_00: Is it a different diet than your next door competitor?
• 33:21
  SPEAKER_00: Because if it's not, you might get a few quarters, maybe a couple of years of head start in this by employing some of this next gen next gen tech, but you won't stay there and it's not it's not going to be sustainable because at some point that cost comes down to such nothingness to be able to have every brand, little brands, up-and-comer brands, giant brands, basically contending the same thing.
• 33:52
  SPEAKER_00: If you're structuring the interaction so that you're getting different data from your competitor, your from your customers directly, that can start to make a real advantage with this tech.
• 34:04
  SPEAKER_00: If you are pulling in some unique data that your competitive set doesn't have, that can make real advantage with this tech.
• 34:12
  SPEAKER_00: But this tech alone, I'm not convinced, after this first sort of big thrust, won't just plateau out where everybody's back at, you know, some version of parity with one another.
• 34:24
  SPEAKER_00: So the work now to figure out what's the uniqueness of the data sources uh that I'm building natively into the interaction with my brand, and what are the ones that I round it out with, if I can get a head start on that now, that has a more significant moat around it than just like, can I employ Einstein?
• 34:46
  SPEAKER_00: Can I get this thing to like automate?
• 34:49
  SPEAKER_00: You know, can I use Optimove's newest blah, blah, blah, to do it?
• 34:54
  SPEAKER_00: Like, sure, but if like four of you in the category are all an Optimove or you're all using Salesforce or all blah, blah, blah, like, aren't we just kind of back where we started?
• 35:03
  SPEAKER_00: The arms race of personalization kind of mutes itself.
• 35:09
  SPEAKER_01: It's a great point.
• 35:10
  SPEAKER_01: Do you are most you know I'll I'll I'll use it more of a consumer example.
• 35:16
  SPEAKER_01: Like millions and millions of people every day are using Chat GPT.
• 35:21
  SPEAKER_00: Yeah.
• 35:21
  SPEAKER_01: Um and and and so let's say that that's kind of a common denominator if we were sort of to build an example around what you were just talking about.
• 35:30
  SPEAKER_01: Are the companies that that that sort of sense the problem that you just talked about, like hey, you know, eventually aren't we gonna end up in the same place?
• 35:39
  SPEAKER_01: Are they building uh their own AI tools to to to help with that?
• 35:46
  SPEAKER_00: Um it's it's a mixed bag, right?
• 35:49
  SPEAKER_00: Like depending on the size of the company that we're talking about, uh, it could be yes.
• 35:55
  SPEAKER_00: At the higher end, it's a yes.
• 35:57
  SPEAKER_00: You know, there's things that they've identified are capabilities that they need to have sort of natively themselves bespoke for their business that can't just be sort of outsourced.
• 36:08
  SPEAKER_00: But as you come down in the strata of maybe the size of the business and how much RD and capital budget they can they can put towards stuff like this, um, they're going to aggregators and people who can provide that to them at you know way more cost-effective means.
• 36:26
  SPEAKER_00: That's where the sort of like mirrored, mimicked middle, you know, it threatens to be, where like it's all just kind of the same.
• 36:35
  SPEAKER_00: Everybody on Shopify has got the same thing and it's all hooked into GPT.
• 36:39
  SPEAKER_00: Like, congratulations.
• 36:40
  SPEAKER_00: You're all back at the same start line again.
• 36:43
  SPEAKER_00: And so I think um let's see, let's let's stay on the chatbot example.
• 36:50
  SPEAKER_00: All of that conversation, and now first generation chatbots on most like retailer websites were not that helpful.
• 36:57
  SPEAKER_00: It was sort of a glorified FAQ that was semi more searchable than that, but it wasn't terribly helpful.
• 37:06
  SPEAKER_00: And a bunch of the data that we have would say like some AI in its first applications was almost like mismatched to the place where customers wanted it.
• 37:15
  SPEAKER_00: When I have a problem, I actually don't think that's the thing I want.
• 37:19
  SPEAKER_00: I want a human who goes like, hey, got it.
• 37:22
  SPEAKER_00: Let me try a few different avenues for you here.
• 37:25
  SPEAKER_00: The next generation of those chatbots, like there's just so much profile-rich uh data that gets volunteered into those conversations.
• 37:37
  SPEAKER_00: And every conversation builds on itself.
• 37:39
  SPEAKER_00: I would say, like, we'll kind of look back quaintly at those first set of chatbots and be like, what were we thinking?
• 37:47
  SPEAKER_00: But it was a step, right?
• 37:49
  SPEAKER_00: It was a step in the right direction.
• 37:52
  SPEAKER_00: When open AI or Gemini or one of these like teaches the whole world that like every conversation builds on itself and the whole thing gets smarter and more intuitive, and then they show up at your retailer website and it's still this like non-logged in FAQ glorified query tool, it's you just seem wildly out of step with my expectations as a customer.
• 38:16
  SPEAKER_00: And so I think the more that brands move into it, not just because they think they should, and every marketer's got an AI mandate, and and those are reasons too, but not just because of those reasons, because you can learn something about the customer that you can actually use in making them smile or making them feel a little bit more seen.
• 38:40
  SPEAKER_00: All of the, or give only the ones access to the things that you can afford to give them access to that you know it is going to be worthwhile to do.
• 38:50
  SPEAKER_00: So our data would say showing customers you know them and giving them access to the relevant things is actually for the first time in, I don't know, 15 years of some of this data that we've been we've been collecting.
• 39:04
  SPEAKER_00: It's more important than the financial component of the program.
• 39:08
  SPEAKER_00: It doesn't mean you can like drop your dividend if you if you get the chatbot right, but it means that like the thing that used to drive most participation um in an almost equal way was the financial aspects, the monetary components of the program.
• 39:24
  SPEAKER_00: They were almost equally weighted with everything else.
• 39:27
  SPEAKER_00: And for the first time in the last year, 18 months, financial has dipped and know me and access are up and up significantly.
• 39:37
  SPEAKER_00: So that tells me that like the human need is there.
• 39:41
  SPEAKER_00: We want this in our relationships with brands.
• 39:44
  SPEAKER_00: The tech is now here that we can harness the data and do something at speed and at scale.
• 39:50
  SPEAKER_00: So let's let's wait into that future, you know, not just first mover advantage, think about what can be unique into that future.
• 40:01
  SPEAKER_01: Gotcha.
• 40:01
  SPEAKER_01: Well, another great segue into looking forward.
• 40:06
  SPEAKER_01: So when when you um think about everything that you've just talked about and the things that the changes you've seen over that last 12 to 18 months, um, and maybe we just touched on them, but but are there some some opportunities that you think um a lot of brands are simply missing um by not tapping into some of these things we just we just discussed?
• 40:30
  SPEAKER_01: And and you know, what are they underestimating uh the brands out there um that they really need to be paying attention to um in the next year?
• 40:38
  SPEAKER_00: I'm gonna nest two of these things.
• 40:41
  SPEAKER_00: Like I think that intelligence, that's just a no-brainer.
• 40:44
  SPEAKER_00: That's you taking off the blinders of loyalty's blind spot that like I only see AJ do the things he does with me.
• 40:52
  SPEAKER_00: Just number one, that customer is way more contact.
• 40:55
  SPEAKER_00: Start tapping into that context.
• 40:57
  SPEAKER_00: And I think um one of the ways, this is the nested part, one of the ways to do that is through friends, through partners.
• 41:05
  SPEAKER_00: So I think like there's a bit of me that that sort of can't believe that the the rest of the industry hasn't taken to this plot as quickly.
• 41:14
  SPEAKER_00: When Starbucks and Delta partnered up, I remember like it slapped me in the face.
• 41:21
  SPEAKER_00: I was like, so Delta knows every time I fly with Delta.
• 41:28
  SPEAKER_00: As the pandemic was coming back, shh, don't tell anybody, I flew everyone.
• 41:33
  SPEAKER_00: Like I was halfway in every loyalty program going.
• 41:37
  SPEAKER_00: Number one, because the routes were all messed up and it's not like it was before, not as frequent, et cetera.
• 41:43
  SPEAKER_00: Number two, because you know, a lot of my flying is for professional reasons for work, and I'm on somebody else's schedule.
• 41:52
  SPEAKER_00: So I'm not emailing back going, you know, I'd really like to get further in sky miles.
• 41:57
  SPEAKER_00: So if we could move the meeting to four hours later, that would let me take this flight.
• 42:00
  SPEAKER_00: Like that's just not, that's not real.
• 42:03
  SPEAKER_00: And so all that promiscuity of flying different airlines, I started to realize like when Delta and Starbucks partnered, they could be like, okay, uh, Sean gets a latte every day in New York City.
• 42:20
  SPEAKER_00: This morning, he showed up in Arizona.
• 42:23
  SPEAKER_00: Did um hey Delta, he fly you?
• 42:28
  SPEAKER_00: And Delta's like, no, he did not.
• 42:31
  SPEAKER_00: That is not a data signal that Delta naturally gets.
• 42:35
  SPEAKER_00: You know, you could argue with some of these big programs that have got payment cards.
• 42:39
  SPEAKER_00: Maybe if I used my Delta card to buy the Southwest flight, why would I do that?
• 42:45
  SPEAKER_00: You're not giving me a good reason to do that.
• 42:46
  SPEAKER_00: That seems sort of cognitively dissonant.
• 42:50
  SPEAKER_00: Um, and so Starbucks became this like bellwether on all the missed occasions for Delta.
• 42:59
  SPEAKER_00: And just that one data signal alone to fill in the denominator of how many flights Sean takes.
• 43:07
  SPEAKER_00: Numerator with us, denominator generally, I think those partnerships are a sleeping giant of a way to build the intelligence.
• 43:18
  SPEAKER_00: Like it'll do other jobs, it'll drop your CPP because somebody else is paying for some points.
• 43:23
  SPEAKER_00: And so, you know, everybody's sort of chasing a real retail media network or some baby version of it, which I think partnerships can get you to.
• 43:32
  SPEAKER_00: And in and there's lots of virtues like that.
• 43:34
  SPEAKER_00: It'll drop your CPP, et cetera, et cetera.
• 43:37
  SPEAKER_00: But I think one of the best things it'll do is it'll smarten up, it'll give intelligence to an LTV score that is totally understated, or a next best action or offer model that just doesn't have enough of the right context data.
• 43:54
  SPEAKER_00: All the churn models that are totally off because you can't see the other behavior.
• 44:00
  SPEAKER_00: And activity at a usable customer or member level.
• 44:04
  SPEAKER_00: Like that world is disappearing.
• 44:07
  SPEAKER_00: And this world, that intelligence-based world, probably collaborating with friends, partner, brands.
• 44:13
  SPEAKER_00: I think that's the way that loyalty gets its like next step change growth.
• 44:19
  SPEAKER_00: Right.
• 44:19
  SPEAKER_00: In that S curve, I think we were plateauing out a little bit.
• 44:23
  SPEAKER_00: This is that next incline.
• 44:26
  SPEAKER_01: What strikes me about your example with Starbucks and Delta is, and and and maybe we'll we'll end on this, maybe this is advice that you would give.
• 44:34
  SPEAKER_01: Um what strikes me about the example is that Starbucks is so ubiquitous.
• 44:41
  SPEAKER_01: And clearly the reason, I mean, among many that it it works in the example you gave is because any city that you go to you're gonna dive in.
• 44:55
  SPEAKER_01: So it's a really good bet that you're gonna that that you're gonna hit one of them.
• 45:00
  SPEAKER_01: Yeah, yeah.
• 45:01
  SPEAKER_01: So is that is the advice that if as you look for partnerships where that data could be really helpful, look for examples where where the partner is ubiquitous, um, you know, part of that customer's life.
• 45:15
  SPEAKER_00: And and this this ubiquity is location based, right?
• 45:20
  SPEAKER_00: There's likely other categories where like the ubiquity you want is um, you know, uh a frequency oriented.
• 45:30
  SPEAKER_00: Are they spending time on Duolingo today keeping a streak alive?
• 45:35
  SPEAKER_00: Um and so I think if you're an airline, you need something location-oriented.
• 45:40
  SPEAKER_00: And so the ubiquity of a Starbucks or a McDonald's or somebody who just has like a blanket network, you know, that can vibrate every time you show up, anywhere you show up.
• 45:50
  SPEAKER_00: That's the right answer for Delta.
• 45:52
  SPEAKER_00: But if we start switching categories to grocery and some of these other places where like there's a different habit or there's a different ritual, there's likely different partner potentials sitting in brands and categories that are not as intuitive now as Delta and Starbucks seems.
• 46:13
  SPEAKER_00: And I think that's kind of the new frontier is to figure out who that bedfellow set of partners can be.
• 46:22
  SPEAKER_00: And again, to provide value to the customer.
• 46:24
  SPEAKER_00: The value there was like as I take the Uber as a Sky Miles customer and somebody in my in um Starbucks rewards, the whole thing becomes like a circuit.
• 46:36
  SPEAKER_00: I don't look at Lyft because it's not connected to this circuit.
• 46:39
  SPEAKER_00: I don't look at McDonald's because it's not connected to the circuit.
• 46:42
  SPEAKER_00: And when I show up at the gate, the coffee is ready just in time to be hot for me to get, you know, like somebody thought about the entire circuit and the whole customer experience.
• 46:53
  SPEAKER_00: And as a result, you just start locking out some of the competitors and you don't lose those little occasions that would otherwise pick a customer apart.
• 47:02
  SPEAKER_01: Yeah, really fascinating stuff.
• 47:04
  SPEAKER_01: Sean, thank you so much.
• 47:06
  SPEAKER_01: This has been a great conversation, and um, we really uh look forward to hearing more from from you and Bond uh as we get into 2026.
• 47:14
  SPEAKER_00: So, man, thanks for having me.
• 47:15
  SPEAKER_00: And uh hopefully to your listeners at L360 as you go into 26, get bullish because I think there's a lot of uh a lot of great things to do.
• 47:23
  SPEAKER_00: Thanks for thanks for having me on.
• 47:25
  SPEAKER_01: Absolutely.
• 47:25
  SPEAKER_01: I want to thank everyone for tuning in to our Leaders in Customer Loyalty Podcast series.
• 47:30
  SPEAKER_01: If you haven't already, please subscribe to the Leaders in Customer Loyalty Podcast and follow Loyalty360 on YouTube and LinkedIn.
• 47:36
  SPEAKER_01: The links are provided below.
• 47:38
  SPEAKER_01: Please join us every Tuesday for another edition of our Industry Voices podcast.