#211: Loyalty Programme Liability Modeling (Short Summary Show)

In this short summary show, “Let’s Talk Loyalty” revisited an episode with Len Llaguno, founder of Kyros Insights. Len uses his professional training as an actuary to assess loyalty programmes not in terms of liability, but profitability and possibility.

We talked about why redemptions are such a signal of a strong programme and an investment in the company’s long-term success.

Len also shared how brands should employ a “customer-first” mentality and also segment their customers to maximize the effectiveness of their loyalty programmes.

Show Notes:

1) Episode #76: Loyalty Programme Liability Management – Len Llaguno, Founder of Kyros Insights

2) Len Llaguno, founder of Kyros Insights

Audio Transcript

#211: Loyalty Programme Liability Modeling (Short Summary Show) (6m)

Welcome to Let’s Talk Loyalty an industry podcast for loyalty marketing professionals. I’m your host, Paula Thomas. And if you work in loyalty marketing, join me every week to learn the latest ideas from loyalty specialists around the world. This show is sponsored by Comarch, a global provider of innovative software products and business services. Comarch’s platform is used by leading brands across all industries to drive their customer loyalty powered by AI and machine learning. Comarch technologies allow you to build, run and manage personalized loyalty programs and product offers with ease for more information, please visit comarch.com.

Paula Thomas

00:00:51

Hello, and welcome to this week’s short episode of Let’s Talk Loyalty. When I’m looking back on my conversation with Len Llaguno, founder of Kyros Insights. What I love about Len is that he trained as an actuary, so he brings great insights into the inner workings of the mathematics driving loyalty programs work from a profitability perspective. The role of an actuary Len explained to me is someone who makes predictions over long time horizons. Most actuaries work in the pension or life insurance industry, but Len has used those same skills to optimize and predict how loyalty programs can be the most profitable Len helped to put into perspective how to view a good loyalty program with the purpose of maximizing the lifetime value of a brand’s best customers, as opposed to reviewing redemption of loyalty points.

Paula Thomas

00:01:55

For example, a simply a liability with his extraordinary perspective across so many programs, time after time, Len confirms that the customers who end up redeeming loyalty points are five to 10 times more profitable over their lifetimes than an average customer is. So his key message, we shouldn’t be afraid of redemptions are indications that a brand has loyal and profitable customers, and that those customers are being served really well by the business. He gave a great insight that might help change the perception within an organization.

Paula Thomas

00:02:36

As many of us are already bought into this idea, but might need help convincing a finance department who view redemptions as a liability, Len compares the accrual of points as almost like saving for a child’s education. No one is going to say that it’s actually a bad idea, as long as it’s something you plan for setting aside money every month. And really your loyalty program can be viewed in a very similar way, a great investment, but that has to be planned and budgeted for another useful point. Land shared is how to use actuarial science to maximize customer value.

Paula Thomas

00:03:19

He talked about having a customer-first mentality, providing the best possible service to the customer in order to maximize their value back to the business. We also talked a little bit about breakage. Some businesses do view breakage as a good thing, like a bill that no longer has to be paid. But again, Len says that breakage shouldn’t be viewed in this way and went back to his statistic that loyal customers who actually do redeem their points are the most profitable to your brand. The really are some great tips in this episode on how we can segment our customers to maximize the effectiveness of our loyalty program, Len even named his company, Kyros Insights after the Greek God of Opportunity.

Paula Thomas

00:04:10

And I really think this fits perfectly with what a good loyalty program should be an opportunity, both for the business and for the customer. So if you haven’t haired from Len Llaguno, I highly recommend you go back and listen to us. It’s quite simply LetsTalkLoyalty.com/76. That’s it for today. Tomorrow I’m joined by Eadaion Keane who will share the story of loyalty as a marketing strategy for Circle K in my home country of Ireland. And then on Thursday, I’m chatting with Kevin Siew, head of the Shangri-La Circle program based in Hong Kong.

Paula Thomas

00:04:50

Thanks for listening today, guys, This show is sponsored by The Wise Marketer, the world’s most popular source of loyalty, marketing news insights and research. The Wise Marketer also offers loyalty marketing training through its Loyalty Academy, which has already certified over 245 executives in 27 countries as certified loyalty marketing professionals. For more information, check out Thewisemarketer.com and loyaltyacademy.org.

Paula Thomas

00:05:31

Thank you so much for listening to this episode of Let’s Talk Loyalty. If you’d like us to send you the latest shows each week, simply sign up for the Let’s Talk Loyalty newsletter on LetsTalkLoyalty.com. We’ll send our best episodes straight to your inbox, and don’t forget that you can follow Let’s Talk Loyalty on any of your favorite podcast platforms. And of course we’d love for you to share your feedback and reviews. Thanks again for supporting the show.

Publisher’s Note:

This transcript was generated with the help of AI and podcast publishing tools such as Apple Podcast’s transcription service.

In the interests of efficiency and minimising our costs as a small business, it has not been checked by a human.

If you have any comments or concerns about the accuracy of this content, please do contact us for changes or corrections.

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