Latest / Leaders in Customer Loyalty, Powered by Loyalty360 / #504: Leaders in Customer Loyalty: Supplier Voices | How Phaedon Sees Loyalty Evolving from Programs to Personal Systems in 2026

Transcript

#504: Leaders in Customer Loyalty: Supplier Voices | How Phaedon Sees Loyalty Evolving from Programs to Personal Systems in 2026 · Leaders in Customer Loyalty, Powered by Loyalty360

• 0:04
  SPEAKER_00: Hi everyone, this is AJ Schneider from Loyalty360, welcoming you to another edition of our Leaders in Customer Loyalty Industry Voices podcast.
• 0:12
  SPEAKER_00: In these episodes, we talk to the leading agencies, technology partners, and consultants in customer channel and brand loyalty about technology trends and best practices impacting engagement and customer loyalty.
• 0:23
  SPEAKER_00: 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.
• 0:31
  SPEAKER_00: Today we're speaking with Denise Holt, Senior Vice President and Head of Strategy, Experience, Research and Insights at Faden, and her colleague Emily Merkel, Senior Vice President of Analytics and Data Science.
• 0:42
  SPEAKER_00: Fadin is a customer loyalty consultancy with a best-in-class loyalty platform, TALLI, that sponsors flexible, modern programs and provides AI-driven insights that help brands understand and act on customer behavior in real time.
• 0:55
  SPEAKER_00: Faden helps brands design, optimize, and measure loyalty strategies by combining consumer research, behavioral insights, and practical frameworks that drive long-term customer engagement and value.
• 1:04
  SPEAKER_00: Welcome to you both.
• 1:05
  SPEAKER_00: Thanks for joining us.
• 1:07
  SPEAKER_02: Thank you, AJ.
• 1:08
  SPEAKER_02: Good day.
• 1:10
  SPEAKER_00: Awesome.
• 1:10
  SPEAKER_00: It's great to have you guys here.
• 1:11
  SPEAKER_00: So I want to start off by kind of looking backwards, right?
• 1:16
  SPEAKER_00: Because we're we're going to be talking about trends and so on as we move into 2026.
• 1:20
  SPEAKER_00: So let's let's look back at 2025 for a minute.
• 1:23
  SPEAKER_00: And when you do that, what what are the 2025 predictions about loyalty that we may have been talking about, you know, a year ago?
• 1:33
  SPEAKER_00: Um, you know, predictions, assumptions, expectations.
• 1:36
  SPEAKER_00: Um, you know, what are the things that ended up, you know, coming true and and what are the things that ended up being short-lived and and didn't happen at all?
• 1:48
  SPEAKER_02: Um so I guess really thinking back, um, one of the most common or most prevalent predictions, I think, across all industries, um, including loyalty, uh, was that people expect it and said AI is going to replace humans.
• 2:07
  SPEAKER_02: Um and I think we feel that that prediction kind of missed in a few different ways.
• 2:13
  SPEAKER_02: Um yes, AI is here.
• 2:16
  SPEAKER_02: That is absolutely true.
• 2:18
  SPEAKER_02: However, um really companies first and foremost haven't really been able to fully productionalize AI across our whole organization in the scale of which, you know, I think was predicted, right?
• 2:30
  SPEAKER_02: Of removing all humans.
• 2:32
  SPEAKER_02: Um, and there's been a lot of learnings and testing to really be able to make that fully happen that just hasn't happened in the last, you know, year, takes longer than that.
• 2:43
  SPEAKER_02: Um, I think the second thing is that brands have also been a little bit slower in adopting AI in those consumer-facing ways, um, more than had been anticipated.
• 2:55
  SPEAKER_02: And I think that could be for a few reasons.
• 2:58
  SPEAKER_02: Um, one is, you know, understanding and how to do it and all of the elements that need to be in place to be able to make that change, right?
• 3:07
  SPEAKER_02: To kind of the first part of like not being able to fully productionalize it.
• 3:11
  SPEAKER_02: Um, but I think really what it's also leading to is maybe even more importantly, that um consumers and brands are also realizing that human service touch points, like those human interaction touch points, are actually more important or more critical um in certain in certain experiences than they ever had been before because of AI um coming into the into the world.
• 3:43
  SPEAKER_01: Yeah, I can build upon that, Emily.
• 3:45
  SPEAKER_01: Um, because I agree.
• 3:47
  SPEAKER_01: The way the way we think about it is that AI should be leveraged to remove the more mundane administrative tasks so humans can focus on what really matters.
• 3:57
  SPEAKER_01: Um, as Emily said, it kind of was AI is going to take over everything and it'll run loyalty.
• 4:02
  SPEAKER_01: And um, you know, it's not about replacing human service, it's about amplifying and enhancing it.
• 4:08
  SPEAKER_01: Because when human service becomes more meaningful and more personal, that's when you see the stronger emotional connections with customers and ultimately better business outcomes because you're doing that.
• 4:20
  SPEAKER_00: Yeah, it it almost seems, and you alluded to this, but it almost seems that that, you know, if if companies, you know, embrace both the AI, you know, portion of their loyalty program, let's say moving forward, but also really look at this as an opportunity to um to be more human uh and and to go, I dare I say it, maybe even a little old school uh in in in some of their touch points and and and approaches, that that that indeed may be a differentiator um, you know, right off the bat in this day and age.
• 4:51
  SPEAKER_02: Absolutely.
• 4:52
  SPEAKER_02: You know, and AI can help them understand and make those touch points more personalized, but it's still that interaction that is going to set you apart, right?
• 5:02
  SPEAKER_02: Humans are kind of craving that.
• 5:04
  SPEAKER_02: They're craving that interaction at certain touch points.
• 5:06
  SPEAKER_02: It doesn't mean it's right for every um every touch point along that journey, but making it the right one really does set a company and that brand apart and building that relationship with a consumer.
• 5:19
  SPEAKER_00: Well, you you jumped in and started talking about AI right off the bat, which is great, which is great.
• 5:24
  SPEAKER_00: We were we were gonna get to that.
• 5:25
  SPEAKER_00: So let's just let's just keep going with the with with the AI uh kind of portion of our discussion.
• 5:31
  SPEAKER_00: Um, so it it brings into question the idea of of and again, you alluded to it of sort of who's ready for it and and and who's not, which brands are are sort of taking that, you know, to heart.
• 5:43
  SPEAKER_00: But as you look at the brands that are doing a good job of that or are poised to do a good job of that, and then you see the ones that aren't, where where are those gaps?
• 5:54
  SPEAKER_00: Um, is it you know, is there an organizational readiness that still has to happen kind of across the board?
• 6:01
  SPEAKER_00: And and if there are gaps, is that is it technology, is it resources, talent, um, data issues?
• 6:09
  SPEAKER_00: Can you guys talk a little bit about where you see, you know, uh companies maybe struggling a little bit?
• 6:15
  SPEAKER_02: Yeah, absolutely.
• 6:16
  SPEAKER_02: I'll I can start, Denise, if you um I think there's there are gaps kind of across the funnel, right?
• 6:23
  SPEAKER_02: You mentioned a few of them, but like the data structure, data structure needs to be different for AI.
• 6:27
  SPEAKER_02: And when we're saying AI, it's different from traditional predictive AI, right?
• 6:31
  SPEAKER_02: Like that data structure is different than what's needed for um agentic or gen AI.
• 6:37
  SPEAKER_02: Um, so organizations need time to make those changes to capture it and get it in the way to be fed ongoing.
• 6:43
  SPEAKER_02: Um obviously in integrations, right?
• 6:46
  SPEAKER_02: There's more and more integrations coming up within an organization.
• 6:49
  SPEAKER_02: So they are needing to build and scale those integrations.
• 6:54
  SPEAKER_02: And then I I do think that, you know, talent is also a key one.
• 7:00
  SPEAKER_02: Um, and the use cases are still really evolving.
• 7:03
  SPEAKER_02: You know, people started with very tangible use cases, right?
• 7:07
  SPEAKER_02: Like the small ones that they could put their hands around.
• 7:09
  SPEAKER_02: And now those, you know, use cases are evolving and becoming more integrated across their their Martech ecosystem and such, which creates some of the ongoing readiness gaps.
• 7:19
  SPEAKER_02: Um, but I think really, and I had said this in talent is that AI is still really an emerging technology, at least the Gen AI, the agent tech piece of it.
• 7:29
  SPEAKER_02: And there just is a very limited pool of individuals out there who have that deep knowledge and hands-on experience, being able to really deploy it at scale.
• 7:40
  SPEAKER_02: So that I think is one of the largest gaps right now for brands and organizations across every industry is just having that talent to be able to build it, deploy it, and do it right.
• 7:53
  SPEAKER_01: Yeah, Emily, I think the talent and then the um educational component becomes really critical because not everyone is innately set up to be able to understand and leverage it to its full potential.
• 8:04
  SPEAKER_01: Um, I think AI adoption really started with an efficiency play as we've seen it working with a lot of our clients and um industry partners and meaning to like help employees work faster or smarter.
• 8:18
  SPEAKER_01: So I think that's the way that got the most, you know, um, um had the most impact this last year.
• 8:24
  SPEAKER_01: But even with that, there's still people trying to um get rolling.
• 8:28
  SPEAKER_01: Um, now the challenge is really a broader adoption and moving beyond the efficiency piece into how AI can enhance the customer experience.
• 8:39
  SPEAKER_01: So I think people have been um very internally focused with AI this year.
• 8:45
  SPEAKER_01: Now it's about how do we actually impact the experience that our customers have and how do we do some of that?
• 8:51
  SPEAKER_01: The personalization, the meaningful piece, AI can really help accelerate that um in order to do it faster, quicker, and get that data in the hands of the right humans to be able to deliver a great service.
• 9:04
  SPEAKER_01: And I would a much bigger shift.
• 9:06
  SPEAKER_02: Yeah, and I would say, Denise, just to ladder a little bit on that.
• 9:08
  SPEAKER_02: I think consumers are more ready for it too.
• 9:10
  SPEAKER_01: Yeah.
• 9:11
  SPEAKER_02: Right.
• 9:11
  SPEAKER_02: Like we as consumers are much more comfortable using AI ourselves, right?
• 9:15
  SPEAKER_02: Like we all have our, you know, clouds or chat GPs or our favorite that we go to for our own personal things now.
• 9:21
  SPEAKER_02: So I think there is, you know, it's not just the readiness at the at the brand or industry level, it's also at the consumer level that is it that is making it um, you know, ready and write more this year to to institute it kind of across the journey.
• 9:38
  SPEAKER_01: They're understanding the benefits that can come from it.
• 9:41
  SPEAKER_01: Yeah.
• 9:42
  SPEAKER_01: Um, and also the watch outs.
• 9:44
  SPEAKER_01: AJ, were you gonna say something?
• 9:46
  SPEAKER_00: Sorry, I didn't mean to I didn't mean to jump in there.
• 9:47
  SPEAKER_00: Yeah.
• 9:48
  SPEAKER_00: Well, I was gonna ask, it maybe that's a good segue into sort of a little bit of a privacy discussion as well, in the sense that you've you've got people, you know, as part of the loyalty program, sort of handing over data willingly, right?
• 10:03
  SPEAKER_00: In most cases.
• 10:04
  SPEAKER_00: Um, and and then we're applying, you know, as we move forward, we're applying, you know, AI tools on, you know, on top of that to sort of make decisions about what we should show them, what kind of content they should have access to, and so on, based on their, you know, on the data that that they provided.
• 10:20
  SPEAKER_00: But it it makes me wonder though, you know, you you mentioned not from the consumer side being ready, or and and I deal a lot with smaller companies as well.
• 10:30
  SPEAKER_00: Um the tendency is to say, oh, we're gonna apply it.
• 10:33
  SPEAKER_00: I'm gonna use this term uh generically, a chat GPT uh to this data and get X, Y, Z out of it.
• 10:39
  SPEAKER_00: But the reality is from for companies, particularly larger companies that have lots of data.
• 10:44
  SPEAKER_00: I imagine this is where you guys come in at Faden, um you can't really use chat GPT, set it loose on customer data, and and then start making decisions based on that.
• 10:55
  SPEAKER_00: It's dangerous in a whole host of ways.
• 10:58
  SPEAKER_00: So I assume that you know your clients are are using the tools that you create and they're customized specifically for for what they're experiencing, what their data uh is gonna be showing.
• 11:10
  SPEAKER_00: So the customer's safe and and you know, nobody is it's not, you know, there's no danger that it's gonna go out into the cloud, you know, willy-nilly type thing.
• 11:21
  SPEAKER_01: Yeah.
• 11:21
  SPEAKER_01: Maybe I'll I was because I was headed straight into a governance in my next when when you brought that up.
• 11:26
  SPEAKER_01: So that's perfect segue.
• 11:28
  SPEAKER_01: But then Emily, maybe you, you know, you might want to comment on on that after.
• 11:31
  SPEAKER_01: But um the governance piece was a major reason why some organizations were slow to adopt AI early on because they were they were scared and they you need to you need to set up the right guardrails, especially around customer data, um, especially in regulate highly regulated industries, that was really critical before they could move forward.
• 11:53
  SPEAKER_01: So you did see, and especially in some industries, a slow adoption.
• 11:56
  SPEAKER_01: But we're starting to see more organizations really formalize their AI approach and that includes the security in the walls that you're talking about.
• 12:04
  SPEAKER_01: Emily, did you want to add anything more about um about that?
• 12:08
  SPEAKER_02: Yeah, I think and that's that is part of kind of the the setup that companies had to do.
• 12:12
  SPEAKER_02: And and again, you had kind of said, like, well, what do we do at Fade In?
• 12:15
  SPEAKER_02: And absolutely that's our number one goal.
• 12:18
  SPEAKER_02: Um, when we introduced more broad gen AI, right?
• 12:23
  SPEAKER_02: So you're bringing in the LLMs from the outside world that are learning and growing, et cetera.
• 12:27
  SPEAKER_02: Um, we purposely uh did it in a thoughtful way that everything is behind our firewall, right?
• 12:33
  SPEAKER_02: So everything that is being, we get access to the best in class LLMs in the world, um, but is behind our firewall.
• 12:40
  SPEAKER_02: So everything we are putting into it from our cons our customers' data and therefore their customers' data, um, none of that is getting um used to train any models outside the world.
• 12:50
  SPEAKER_02: So it doesn't leak back out.
• 12:52
  SPEAKER_02: And then on top of that, it is also done at a at a client level, right?
• 12:56
  SPEAKER_02: So we're not mixing client learnings across each other.
• 12:59
  SPEAKER_02: So that is obviously was one of our top priorities um a few years ago when we when we started building these tools um because that's important.
• 13:08
  SPEAKER_02: And then the other part is there are also some benefits in doing that too, because then when you're asking for it from that consumer, it also isn't, you know, picking up stuff from somebody else, right?
• 13:19
  SPEAKER_02: And then it doesn't, it's not relevant in your in your world too.
• 13:22
  SPEAKER_02: So um absolutely.
• 13:23
  SPEAKER_02: And I would say, you know, agentic AI just brings a whole different thing, right?
• 13:28
  SPEAKER_02: Like, you know, each tool isn't doing the same thing like a chat GPT where you ask it a question, right?
• 13:34
  SPEAKER_02: Like there needs to be a lot of um thought put into how these these products are being built so that the right thing is answered or the right output comes back, right?
• 13:45
  SPEAKER_02: So that there's guardrails really put around each of those tools.
• 13:49
  SPEAKER_02: And so um it helps, you know, prevent a lot of the hallucinations if it only has data that it's supposed to have and it has that guardrails around, you know, this agent does this, this agent doesn't do something else kind of thing.
• 14:02
  SPEAKER_02: Um, so lots of different things kind of neat happening in that world.
• 14:06
  SPEAKER_02: But I do think that that also um does lead it to like there was a governance piece.
• 14:12
  SPEAKER_02: And I don't know, AJ, if you even thinking about this, but you know, understanding from the consumer side, right?
• 14:19
  SPEAKER_02: Like what am I giving and how is it being used?
• 14:24
  SPEAKER_02: Um, so there is that whole data exchange um aspect.
• 14:28
  SPEAKER_02: And so, you know, Denise, I don't know if you want to talk a little bit about, you know, kind of our take on when we go out with our, you know, our our um clients and such, what are we recommending for really that that kind of that best in class like process for, you know, letting consumers know how data is being used.
• 14:50
  SPEAKER_01: Yeah, I think um in general, it's a couple things.
• 14:53
  SPEAKER_01: It it has not changed that customers are willing, especially younger generations, to provide give up data, give up information about themselves if they see a direct turnaround of value back in return.
• 15:06
  SPEAKER_01: So that hasn't changed.
• 15:07
  SPEAKER_01: AI will just um, you know, speed up the ability to leverage that data in a meaningful way.
• 15:13
  SPEAKER_01: Um, I think it's important uh with customers, with our clients too, that they think about what are those key pieces of data that are important to collect in order to impact the experience.
• 15:26
  SPEAKER_01: Um, because you don't need to collect data just for the sake of collecting data.
• 15:30
  SPEAKER_01: So um when you think about that for the future, it's about really being able to act on it immediately to demonstrate value, to personalize an experience, to help the member, to help develop this more emotionally connected relationship and feedback that you understand them and you're here to make their lives better and easier.
• 15:49
  SPEAKER_02: Yeah, and it's a little bit about transparency as well, right?
• 15:52
  SPEAKER_02: Like um brands who are transparent with what they're doing continue to build that trust with their consumer base.
• 16:01
  SPEAKER_02: Right.
• 16:02
  SPEAKER_02: So being able to explain it clearly um and again, what that value exchange is gonna be really helps create that relationship.
• 16:12
  SPEAKER_02: And so, you know, you don't want to hide what you're doing, right?
• 16:17
  SPEAKER_02: Um, because that can only lead to bad things, but also you need to do it in a way that like your consumer isn't going through 30 pages of TNCs to understand what's happening as well, right?
• 16:28
  SPEAKER_02: So it's about using those effective communications in a very, you know, clear and human speak way about what you're doing, um, and not making it super technical as well to articulate the value and what they're doing with it.
• 16:42
  SPEAKER_00: Yeah.
• 16:43
  SPEAKER_00: No, I all of that makes perfect sense.
• 16:45
  SPEAKER_00: And and and so why don't we kind of take a step back and talk about sort of the the the strategy and program design that that you guys are seeing a little bit in terms of of your clients and and and what they're looking at moving forward?
• 16:57
  SPEAKER_00: And you know, one of the things that we're seeing in the loyalty industry as as a whole is kind of the blending of of different types of loyalty strategies and combining them into sort of one approach.
• 17:08
  SPEAKER_00: So maybe combining memberships and subscriptions and and and other loyalty-specific, you know, programs.
• 17:15
  SPEAKER_00: What are the benefits of of that blending that you're seeing and and how does Faden help address the issues that that might come from that?
• 17:25
  SPEAKER_01: Yeah, I think brands are always looking for new revenue streams.
• 17:28
  SPEAKER_01: So that's really where subscription models have come into play and they create a more predictable revenue, but they also complicate the story for customers.
• 17:38
  SPEAKER_01: So you really have to be very intentional about differentiating the benefits across tiers and making it clear why someone would choose one option over another.
• 17:50
  SPEAKER_01: And if it gets too complex or hard to understand, it really becomes a barrier to customers interacting with you.
• 17:57
  SPEAKER_01: And I think about this in the way of like tiers.
• 17:59
  SPEAKER_01: Some clients are talking about we we have a completely separate subscription program, um, but now it's conflicting with our highest elite tiers as far as the benefits that are received.
• 18:13
  SPEAKER_01: So, how do we get clarity between those two?
• 18:15
  SPEAKER_01: How do we really understand whether a subscription model is an overlay and an add-on to our existing tiered loyalty structure, or whether it could it needs to continue to sit off to the side as something completely separate from that?
• 18:31
  SPEAKER_01: So I think just taking a holistic look at your tiering structure, your benefits, your subscription, um, looking into research on your customers and what their needs and wants are, what's going to move, what's going to change their behavior in a way that's positive for your business and delivers value for them.
• 18:49
  SPEAKER_01: Um, and take and taking a look at that as a whole so that you make sure you have clear distinctions between them and that there's value in each of those different areas.
• 18:57
  SPEAKER_01: Emily, do you have do you want to add to that?
• 19:00
  SPEAKER_02: Yeah.
• 19:00
  SPEAKER_02: Um I would say kind of Denise's, you know, talked about the complexity that adds to it and needing to do it in the right way for the value exchange.
• 19:09
  SPEAKER_02: Um we help a lot of our of our customers around how do you know if it's right, right?
• 19:17
  SPEAKER_02: And all of that comes back to the data and the analysis and your customer base, right?
• 19:22
  SPEAKER_02: So if as you're blending these different mechanisms within loyalty, it's really understanding where is there an audience, right?
• 19:30
  SPEAKER_02: Do you have an audience that a paid subscription would work or a membership?
• 19:35
  SPEAKER_02: Um, and what would they pay for that, right?
• 19:37
  SPEAKER_02: Like where are those points?
• 19:39
  SPEAKER_02: And data can help you get to that customer research layered on top of that, also gets the ability to understand what that impact would be and can also help really model the ROI, right?
• 19:52
  SPEAKER_02: So the ROI of what the benefit will be to your customer and to the brand.
• 19:57
  SPEAKER_02: Um, and so we do a lot of that um.
• 20:00
  SPEAKER_02: Through economic modeling, strategy engagements and research.
• 20:04
  SPEAKER_02: Because again, it all comes back to making sure that as things blend and you're building out a program and an engagement strategy with your customer base, that there's value for both sides.
• 20:17
  SPEAKER_02: And so you don't want to just add complexity for the sake of it if it doesn't make sense.
• 20:21
  SPEAKER_02: So it all comes back to really helping make sure there is data, there's a pocket, there's a consumer need for what you're doing.
• 20:30
  SPEAKER_02: Um, and that you're providing that value to them and to you as a business as well.
• 20:35
  SPEAKER_00: So let's let's talk about that sort of engagement strategy aspect of this for a minute.
• 20:40
  SPEAKER_00: Um, and and specifically about um the concept of shared experience uh as a way to build loyalty.
• 20:47
  SPEAKER_00: Um, more brands have really begun to take that piece seriously in this idea of creating shared communities, um, you know, and and playing off of the customer identity and sense of belonging to a larger group as part of the loyalty program.
• 21:01
  SPEAKER_00: What are some of the most effective ways that you've seen brands, your clients, uh, you know, embedding those kinds of features into their loyalty programs?
• 21:11
  SPEAKER_01: Yeah, I think this has become really, really important.
• 21:14
  SPEAKER_01: Um, one of the big underlying trends we've seen is an increase in loneliness as the world becomes more digitally driven.
• 21:22
  SPEAKER_01: So community and belonging, whether that's facilitated digitally or in person, really can help restore that sense of human connection.
• 21:32
  SPEAKER_01: And I think loyalty programs can play a meaningful role there.
• 21:37
  SPEAKER_01: Um, you've seen this with examples like Nike Run Clubs or outdoor brands that focus on maybe conservation and shared values, trying to connect to the heart and people's um people's values.
• 21:53
  SPEAKER_01: They're creating spaces for people to connect around something bigger than a transaction and quite honestly bigger than themselves.
• 22:01
  SPEAKER_01: Um, and that's where this belonging piece really starts to take shape.
• 22:08
  SPEAKER_02: Yeah, in in the brands that do it well, you know, Denise mentioned Nike, um, but brands that do it well are doing it because they understand their consumer base.
• 22:19
  SPEAKER_02: Again, right?
• 22:20
  SPEAKER_02: They're not trying to build community for community's sake.
• 22:23
  SPEAKER_02: They're they're building it around a need.
• 22:25
  SPEAKER_02: Um, and they're building it around a need that also is true to their core values as a as a brand as well.
• 22:32
  SPEAKER_02: So it's authentic in what it's doing.
• 22:35
  SPEAKER_02: Um, so they know what matters to them and they align those values.
• 22:39
  SPEAKER_02: And again, it creates that authentic relationship between them and their and their customers so that it can it can have reason for being and um feel true to the to the customer too.
• 22:52
  SPEAKER_00: Is there you kind of going back to the to the AI tools and and and personalization, customization, uh you know, part of the the the psychological um approach here, right, is that if if a consumer can potentially see themselves or or or see their values in in the the you know the brand that that they're working with or that they're being approached by, um they're more likely to buy.
• 23:20
  SPEAKER_00: Um and that's a you know, that's been an an advertising principle for you know for eons, right?
• 23:25
  SPEAKER_00: So are are brands also being uh sort of more individually specific?
• 23:32
  SPEAKER_00: I mean, it's one thing to sort of create a a community and and sort of like I'll say like-minded, you know, potential customers or existing customers, you know, we'll will kind of gather toward that.
• 23:42
  SPEAKER_00: But uh through personalization, is it possible to to sort of tease out individual customers' um you know, sensibilities and and feed them content and information based on their individual um you know affiliations?
• 23:59
  SPEAKER_01: Yeah, I think I think that um as a brand, you stand for things that you kind of put out out uh customer facing um that maybe attracts a customer in the first place with shared overarching values.
• 24:14
  SPEAKER_01: I do think though that as you become um a customer, as you become a loyalty program member, as there's opportunities to learn more information about you, um, brands can ask more detailed levels about they might, for example, offer up a benefit where you can choose between four of this year's um charities.
• 24:35
  SPEAKER_01: And you start to learn a little bit by little bit where does this overarching shared value come into something even more specific, into an organizational level and a charity that you appreciate supporting.
• 24:47
  SPEAKER_01: So I think there's ways with zero-party data where you can take that down to a deeper level.
• 24:52
  SPEAKER_01: And again, what will be your reason for asking that?
• 24:55
  SPEAKER_01: What are you going to do with that data?
• 24:57
  SPEAKER_01: It's a it's a feel-good moment, I think, when um when you're able to allow an individual to have a choice in where a benefit goes and they feel like they um they got to support that organization a little more closely because they chose to direct that benefit that way.
• 25:14
  SPEAKER_01: Um, but at the very highest level, it has to be the shared values of um the brand itself.
• 25:20
  SPEAKER_01: Why, why were you attracted to the brand itself?
• 25:23
  SPEAKER_01: What is it that they're putting out in the universe that shows you feel good about saying that's that's a brand that you do a lot of business with, and then developing the choice and leveraging zero-party data to take that further.
• 25:33
  SPEAKER_02: And I think the AI piece on personalization comes in that you can still have community and all of those elements, but also there's moments when introduction into those communities or key, you know, key key timings in the journey that personalization can help, right?
• 25:52
  SPEAKER_02: Like you may you may not want to target everybody for certain of uh elements of these communities or the belonging experiences that they're looking for.
• 26:02
  SPEAKER_02: Um AI and data can help you understand when is the appropriate time to introduce it?
• 26:09
  SPEAKER_02: When when are people getting more involved?
• 26:11
  SPEAKER_02: Is it after certain interactions with a brand?
• 26:14
  SPEAKER_02: Um, is it right away?
• 26:16
  SPEAKER_02: You know, all of those pieces.
• 26:18
  SPEAKER_02: We're not as humans all the same.
• 26:20
  SPEAKER_02: So AI can also help do that.
• 26:22
  SPEAKER_02: And like, how how do I need to be communicated about one thing versus somebody else that's different, or what channel I want to be?
• 26:29
  SPEAKER_02: Those are different ways that they can all still have the same community or the value, the benefit, but still personalize that experience within there as well.
• 26:38
  SPEAKER_01: Well, like community and connection mean different things to different people too.
• 26:42
  SPEAKER_01: We did our um fade in 2026 predictions, and uh mine was about that brands are gonna let consumers um decide how how connected they want the relationship.
• 26:54
  SPEAKER_01: Maybe they just maybe they want to just be slightly anonymous but get great service and they love the brand.
• 27:00
  SPEAKER_01: And as long as they know they support that, that's great.
• 27:03
  SPEAKER_01: Down to I want to share everything about my life with you.
• 27:06
  SPEAKER_01: And then I want you to turn around and do great things and personalize my experience.
• 27:10
  SPEAKER_01: So, like almost seeing a scale of a first question as you join a loyalty program.
• 27:15
  SPEAKER_01: How well do you want us to know you?
• 27:17
  SPEAKER_01: And the consumer is going to have a lot of choice in that, almost like a sliding scale that they can choose.
• 27:22
  SPEAKER_01: And then that sets off this journey for each of the loyalty program members based on what they chose.
• 27:30
  SPEAKER_00: Design your own loyalty program.
• 27:31
  SPEAKER_02: Yep.
• 27:32
  SPEAKER_02: Exactly.
• 27:33
  SPEAKER_02: And it's transparent, you know what you're getting and why you're getting it, because you told us.
• 27:38
  SPEAKER_01: And whereas in the past, whereas in the past, that would be um very impossible to manage something like that and operationalize so much choice.
• 27:47
  SPEAKER_01: AI and all the advancements that we have are going to make that easier and easier.
• 27:52
  SPEAKER_01: So it'll be interesting to see that play out.
• 27:55
  SPEAKER_00: You you know, another kind of hot topic um, you know, over the past year, really, it's been several years, is is the uh the partnership discussion.
• 28:05
  SPEAKER_00: And so I'm curious, um, you know, as we go into 2026, um, how partnerships fit into everything that you were just talking about, you know, um, are there sp some specific categories uh that you think uh are gonna be um, you know, really rise to the top as we move into the new year?
• 28:24
  SPEAKER_00: Is you know, travel it seems to always be a an important one.
• 28:29
  SPEAKER_00: But, you know, between retail and travel and and financial services and so on, where do you think the biggest growth in partnerships will be in in the new year?
• 28:37
  SPEAKER_01: Yeah, I think um agnostic of what industry you happen to be in, partnerships is the hottest topic right now.
• 28:45
  SPEAKER_01: Um, we're seeing strong momentum around everyday brands.
• 28:49
  SPEAKER_01: So think about grocery, fuel, other frequent purchase categories because they really deliver that daily visible value to the customer.
• 29:00
  SPEAKER_01: Um, larger and more infrequent purchase brands are partnering with them to stay relevant and top of mind.
• 29:08
  SPEAKER_01: I think we saw that um immediately during COVID with big travel brands really leaning on their co-brand credit cards and spending outside of travel because no one was traveling.
• 29:18
  SPEAKER_01: Um, that has just continued on to see that you need to be a part of people's daily lives and how how do you do that?
• 29:25
  SPEAKER_01: So it um it's kind of twofold as well.
• 29:28
  SPEAKER_01: Like you're extending value to existing customers.
• 29:32
  SPEAKER_01: If you're smart about your partnerships, you're extending value to those existing customers, but you're also then getting exposure with new customers because of this partner relationship.
• 29:44
  SPEAKER_01: Um did you want to add to that?
• 29:46
  SPEAKER_02: Yeah, I can.
• 29:47
  SPEAKER_02: Yeah.
• 29:48
  SPEAKER_02: I partnerships is one of the most number one questions we are asked about um most recently, and it's always been a part, but it has majorly escalated in in brands um kind of thought process.
• 30:02
  SPEAKER_02: And as Denise said, right, everybody wants this everyday brand.
• 30:06
  SPEAKER_02: Um, and so I that's that's great.
• 30:09
  SPEAKER_02: However, there are some kind of warning signs or some things that brands also need to look out for um just because you want a partnership doesn't make it necessarily the right partnership to have it, right?
• 30:24
  SPEAKER_02: So there the big watch out that we have and we advise on is that making sure the partnerships you are putting forth make sense for your customer base.
• 30:35
  SPEAKER_02: Um, because if you have a mismatch, sometimes that mismatch could be geography, right?
• 30:39
  SPEAKER_02: Where they're just never gonna overlap at all, ever, or they're never gonna be interesting for that purpose.
• 30:45
  SPEAKER_02: Um, or the value extension is not there for the consumer.
• 30:50
  SPEAKER_02: Um, it's just because you want that partnership, it's gonna create more confusion.
• 30:54
  SPEAKER_02: It's gonna create noise in the program, right?
• 30:56
  SPEAKER_02: So you're gonna have this whole list of partnerships and people are gonna be like, I don't get it.
• 31:00
  SPEAKER_02: Um, so again, it's really coming back to being thoughtful and having that value exchange, right?
• 31:07
  SPEAKER_02: Because you want crossover, right?
• 31:09
  SPEAKER_02: It's good to have deeper relationships of your of your consumer base earning and burning, maybe in a dirt in their daily life somewhere else, but you also want it from an acquisition standpoint.
• 31:18
  SPEAKER_02: So you still want there to be some lack of overlap, right, between each, because you're trying to introduce new people as well to your brand and to your partner's brand as well.
• 31:28
  SPEAKER_01: And I think there's much more pressure now, too, to define a clear mutual value proposition when brands are approaching each other about partnership and what is that mutual value proposition?
• 31:41
  SPEAKER_01: What are we each going to get out of that?
• 31:42
  SPEAKER_01: And um, you were starting to talk about that too, Emily.
• 31:45
  SPEAKER_01: Like having too many partnerships dilutes the brand and complicates the message.
• 31:51
  SPEAKER_01: It really makes it hard for customers to know what's actually relevant to them.
• 31:56
  SPEAKER_01: I think back when, you know, in the early days of loyalty programs and some brands, especially in the travel space, would have hundreds and hundreds of partners.
• 32:07
  SPEAKER_01: And as a consumer, you just literally didn't even, it was so many that it was overwhelming and there weren't tools to figure out what was going to be the most relevant to you.
• 32:17
  SPEAKER_01: What are you gonna love?
• 32:18
  SPEAKER_01: And so what they found is that they weren't even getting the value for having those partnerships because consumers were overwhelmed by it and they didn't even, they just gave up.
• 32:27
  SPEAKER_01: They didn't even know how to sift through it, how to how to create that value.
• 32:31
  SPEAKER_01: So I think this is where kind of AI is going to help with that and bring that personalization to bear.
• 32:37
  SPEAKER_01: I think brands are being much more um selective about the partnerships that they um that they create for the benefit of their customers.
• 32:46
  SPEAKER_01: Um and then they're going to be trying to serve them up in really personalized, relevant ways based on what they know about their customer.
• 32:53
  SPEAKER_00: It sounds like really that's the the the key thread through through all of that is that at the end of the day, if the if you you know you can have lots of fancy partnerships or even one that that that sounds like it has marquee value, but if the customer isn't really deriving value from it, then it it it it wears off pretty quickly.
• 33:11
  SPEAKER_01: Absolutely.
• 33:12
  SPEAKER_00: Yeah.
• 33:13
  SPEAKER_00: Yeah.
• 33:14
  SPEAKER_00: Okay.
• 33:14
  SPEAKER_00: Well, um to wrap up, let's talk a little bit about something that, you know, that maybe folks were thinking, you know, about loyalty that um that you now know having been through, you know, some ups and downs in the economy over the last couple of years, um, you know, with A, the, the, the introduction of AI in a in a much more aggressive way and so on.
• 33:40
  SPEAKER_00: What are some assumptions that people were making about loyalty um uh, you know, over the last couple of years, let's say, that they need to sort of like throw out the window as we as we move forward?
• 33:52
  SPEAKER_00: Like what's what just didn't turn out to be true?
• 33:56
  SPEAKER_01: Um I think it wasn't even really a prediction per se, but I think just the the word loyalty, the biggest outdated assumption is that loyalty is a program.
• 34:08
  SPEAKER_01: And I think that's it's still today, it's it's evolving, but it's still today when you say loyalty, just like, oh, what program are you in?
• 34:14
  SPEAKER_01: Loyalty is the outcome that you're trying to achieve in a relationship between a brand and a customer.
• 34:22
  SPEAKER_01: And quite honestly, that goes it extends beyond that too.
• 34:25
  SPEAKER_01: That can be between a brand and an employee, between a brand and a B2B partner, um, but thinking about loyalty no longer as a program, but um, but an outcome.
• 34:34
  SPEAKER_01: And every part of the organization plays a role in delivering it.
• 34:38
  SPEAKER_01: So that's the part that I think it's gone into is organizational structure.
• 34:42
  SPEAKER_01: If you get beyond thinking about loyalty as a program, that means that every part of your organization has a role to play in developing a loyal relationship with a customer that includes operations, that includes technology, that includes data.
• 34:58
  SPEAKER_01: So really that taking that approach and perspective as an organization helps you to bring more people into the conversation around how to strengthen customer relationships for the long term.
• 35:10
  SPEAKER_02: Yeah, and it makes what everybody is doing align to the same common goal.
• 35:14
  SPEAKER_02: Everybody across your organization is responsible for loyalty.
• 35:19
  SPEAKER_02: And so then it makes decisions easier in what you're doing, and you're all speaking at that common language to drive that same outcome, right?
• 35:29
  SPEAKER_02: That then brings value to your business as well.
• 35:33
  SPEAKER_00: Gotcha.
• 35:34
  SPEAKER_00: Yep.
• 35:34
  SPEAKER_00: Words to live by.
• 35:36
  SPEAKER_00: Well, great.
• 35:37
  SPEAKER_00: Well, thank you guys so much for uh joining us today on the uh the podcast, and uh, we look forward to hearing more, hearing updates from Faden as we move into 2026.
• 35:48
  SPEAKER_02: Thank you, AJ.
• 35:49
  SPEAKER_02: Appreciate it.
• 35:50
  SPEAKER_00: I want to thank everyone for tuning in to our Leaders in Customer Loyalty Podcast series.
• 35:54
  SPEAKER_00: If you haven't already, please subscribe to the Leaders in Customer Loyalty Podcast and follow Loyalty360 on YouTube and LinkedIn.
• 36:01
  SPEAKER_00: The links are provided below.
• 36:03
  SPEAKER_00: Please join us every Tuesday for another edition of our Industry Voices podcast.