Paula: Welcome to Let’s Talk Loyalty, an industry podcast for loyalty marketing professionals.
Paula: 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.
Paula: This show is sponsored by Comarch, a global provider of innovative software products and business services.
Paula: Comarch’s platform is used by leading brands across all industries to drive their customer loyalty.
Paula: Powered by AI and machine learning, Comarch technologies allow you to build, run, and manage personalized loyalty programs and product offers with ease.
Paula: For more information, please visit comarch.com.
Paula: So welcome to the latest episode of Let’s Talk Loyalty.
Paula: And a number of weeks ago, some of you will have seen that we announced a very exciting collaboration with perhaps one of the most famous technology companies in the whole world of loyalty marketing.
Paula: So Comarch is a Polish company and it just has, I suppose, extraordinary credentials.
Paula: And what I love particularly, I’ve often said is, I come to loyalty very much from an operational perspective.
Paula: So I don’t tend to know the ins and outs of all of the tech, but when I look at the clients, particularly of a company like Comarch, it’s always super reassuring.
Paula: So today I’m going to be interviewing Sidney Dunn, who is the Client and Business Development Director for Comarch in the Americas.
Paula: So before I get into all his wonderful background, first of all, I’d like to say, welcome Sidney to Let’s Talk Loyalty.
Paula: Hey there, Paola.
Paula: Thank you for having me.
Paula: I’m very honored to be on here and excited to engage in this conversation with you.
Paula: Wonderful, Sid.
Paula: And I know you’ve listened to lots of my past episodes as well, so that’s always very flattering for me as an interviewer.
Paula: That’s super exciting.
Paula: And just, I suppose, by way of this context, Sid, as I said, I really have been on the operational side of loyalty programs, and as you know and listen or know, I live in Dubai.
Paula: And for example, Comarch is running loyalty programs for brands such as Costa Coffee in the UK, which I know is an extraordinary, very well-known European brand.
Paula: Here in our region, we have Etihad Airways, I know Saudi Arabian Airlines, and even globally, I know you have BP as a client.
Paula: So first and foremost, well done on all that amazing work.
Paula: Thank you.
Paula: Yeah, we’re very honored to be working with those customers.
Paula: I mean, clearly, they’re benchmarks within their respective industries, and they’ve really set the bar high in terms of their loyalty programs.
Paula: So being the main loyalty and technology providers for them is a great honor for us.
Paula: Wonderful.
Paula: Yeah.
Paula: And again, I mean, I’ve seen some of the RFPs that come through and the amount of worth that goes into winning a contract like that is a huge credit to you.
Paula: So listen, let’s get straight into it.
Paula: As you know, we always start the show asking about your favorite loyalty statistic.
Paula: So Sidney Dunn, tell me, what is your favorite loyalty statistic?
Paula: Yeah.
Paula: So I get to see a lot of interesting loyalty statistics from all angles.
Paula: But really what most interests me is how are the customers engaging with the loyalty programs?
Paula: And to be honest, to be fair, that’s probably of interest for most, for the loyalty program providers.
Paula: Yeah.
Paula: So of course, one interesting KPI that has caught my attention was the engagement with millennials.
Paula: And one interesting statistic that I found was it was just the dynamic of how millennials engage with loyalty programs.
Paula: So what the customers within the age range really value is some type of tangible or more like a savings.
Paula: So what’s interesting and what’s the real value to ask for these loyalty programs?
Paula: If this millennial group is willing to give data in something for return that they value.
Paula: And in fact, within some relevant surveys within the industry, I’ve seen that anywhere between 50 to 65 percent of this age range, they’re willing to give some type of data in return for these discounts.
Paula: So I’ve seen things like anywhere between 53 percent, they’re interested in these special offers for items of interest.
Paula: So when they’re willing to give this personal data and share it with the company and the brand in order to get this, and even as high as 65 percent in getting these coupons and discounts and loyalty points.
Paula: So if you’re able to give them some sort of incentives and drive engagement through capturing this data, there’s a real tremendous value add for the program.
Paula: And that’s really where I see everything going.
Paula: I mean, you see in social media, the reasons why Facebook and Instagram and Snapchat have made so much money are so valuable.
Paula: Because they’re getting all this data and then they’re reselling it or they’re using it for internal purposes and then engaging even further with end customers.
Paula: So if the brands can do that with their loyalty program, it’s a super powerful tool.
Paula: Yeah.
Paula: I think that’s an amazing insight, Sid, because I think what certainly what I’m hearing is that particularly that age range are so highly educated about the value of their own data.
Paula: So, you know, data has been collected for years and obviously we’ve had to legislate certainly in Europe around all of that.
Paula: But I think what we’ve realized is there is a value exchange.
Paula: It’s not that the brand collects all of the data and benefits.
Paula: We’re kind of going, actually, now, no, there has to be something in it for me.
Paula: So that sounds like it’s coming through.
Paula: Wow.
Paula: Very clear.
Paula: I love it.
Paula: Great.
Paula: Thank you.
Paula: Great start.
Paula: And I know you mentioned you’re based in New York, Sid, but you do have responsibility for all of the Americas for Comarch.
Paula: So tell us some of the work that you’re doing across, you know, that huge geographical area.
Paula: Right.
Paula: Well, I’m fortunate to be based here in New York.
Paula: I’m a native of the area.
Paula: But I started out with Comarch in 2013.
Paula: And actually Comarch, where, I mean, compared to some of the other technology companies out there, we’re a more mature company.
Paula: But we started off in Latin America in around 2013, and we’ve really grown out the business there.
Paula: But I was originally based in Santiago, Chile, and then I came over here and back home, and I’m working out of our New York offices in the Battery Park area of Manhattan.
Paula: And what we’re doing is we’re engaging with, I mean, up until now, until recently, and I’ll talk more, I’ll elaborate a little bit more about that.
Paula: But we’ve been typically engaging with larger enterprise companies, and they vary based on industry, and helping them implement new loyalty programs and platforms, or if they’re going to transition from another provider or from, let’s say, some internal program or system to a third party provider, as they grow and mature, then we’ll work with them as well.
Paula: And in Comarch, what we’re doing is we’re providing them really with the brain behind or the administration tools to manage the day-to-day of the program, as well to incorporate engagement tools, things like ammification.
Paula: We also offer AI machine learning tools that can be incorporated within the platform and to grade directly to provide real-time analytics, but then also push out real-time interactions.
Paula: So all of this, we’ve been, and me, I’ve been fortunate enough to do this on behalf of Comarch.
Paula: We have customers here and help them implement these technologies and tools.
Paula: And it’s been very interesting getting to see how our loyalty programs have been maturing and developing within each of the regions.
Paula: Because, of course, the US we’re really at the, you know, we’re at the stronghold, I guess, of the loyalty programs.
Paula: We were one of the first regions to introduce frequent flyer programs.
Paula: And of course, that’s developed through many industries, but, you know, SFPs tend to be the gold standard for loyalty and really the value there that it has for the companies, especially in today’s age where all these airlines are relying on their revenues from these loyalty programs to keep them afloat, to pay everybody’s salaries.
Paula: So, you know, and besides, so that’s on the frequent flyer side, but then also really in Latin America, I’ve seen things been developing, especially in places like Brazil and Colombia, is that they’re really relying on these partnership oriented programs and coalition programs, which have really benefited them throughout this latest pandemic, right?
Paula: Where, you know, rather than having one core loyalty program that’s linked to only your spend for a particular item or service of that business, it’s linked to, you know, 20 to 100 partners where you can accrue or redeem your points there.
Paula: And fortunately, they’ve really flourished in times like this.
Paula: So, you know, working with some of the larger banks, like something there in Brazil and Banco do Brasil and Banco Colombia and Colombia, we’ve seen these programs really develop over, you know, over the past few years, but especially in these past few months.
Paula: Yeah.
Paula: And it’s a point I’ve often made, actually, Sid, being in the industry that we are, we are almost countercyclical.
Paula: So when there is anything going on in the wider economy and perhaps, you know, there are recessions going on in various countries, I often feel that it’s brave brands that suddenly go, it’s an opportunity to differentiate, it’s an opportunity to invest, but also the importance of investing in loyalty suddenly becomes an extremely important strategic priority.
Paula: So it sounds like that’s what you’re hearing coming through as well with your clients.
Paula: Most certainly.
Paula: And of course, the degrees of how they want to leverage these loyalty programs to generate revenue vary.
Paula: Sometimes I speak to programs that just ultimately say, we want to keep customers engaged.
Paula: That’s our end goal.
Paula: We want them to earn points and we want them to redeem them.
Paula: Great if we generate some revenue at the end of the day.
Paula: We want to make sure our customers feel valued.
Paula: And we do that vis-a-vis our loyalty program.
Paula: Like I mentioned, it varies, but usually on the travel side, it’s a bit more lucrative.
Paula: And there’s significant value there.
Paula: FMCG and CPG, a lot of times it’s just to engage with them, know who the customer is, and make sure that they remain a loyalty customer throughout their lifetime.
Paula: Yeah, yeah.
Paula: And it is great actually when there is that clarity of focus, because often there’s the internal dynamic, I think, of maybe the CFO does see the revenue opportunity and wants to be very promotional perhaps with the loyalty program, whereas more customer-centric management, in my experience, tend to go, actually, no, let’s not take advantage of this.
Paula: Let’s make sure it’s a mutually beneficial loyal relationship.
Paula: Yeah, of course.
Paula: That’s what’s so interesting about my job is that I’m really indifferent.
Paula: I get to sit down to these meetings and talk with these C-level marketing executives and IT executives and be the fly on the wall.
Paula: Meanwhile, they’re talking about the real strategy behind that drives the program.
Paula: Like you mentioned earlier, I do listen to a lot of your podcasts, and it’s interesting because they’re, of course, these subject matter experts within their companies or within the industry.
Paula: They’re focused on their company and their industry.
Paula: And maybe other benchmarks within respective industries, but I get to see it from all angles.
Paula: So that said, it’s not always easy to translate and to understand what the company is trying to do, that specific company, because I only understand it from a very high level.
Paula: But from a macro view, I’ve seen from all angles how loyalty programs can ultimately impact the program and do things like drive, whether it’s drive revenue, reduce churn, or strengthen customer lifetime value or the net promoter scores.
Paula: So, like I mentioned, I’ve seen it from all angles and there’s not necessarily one metric to follow from even any within any respective industry or type of business.
Paula: And in your experience, I’m genuinely curious now from my own personal experience, I suppose being a consultant, there’s quite a lot of similarity in that I do get to go into lots of companies.
Paula: So in your experience, like what a lot of these C-suite executives typically be looking to you for guidance on what the returns might be that they will get with, you know, adopting and investing in loyalty overall, just because you have that level of visibility?
Paula: Or do you think they tend to have that kind of customer-focused mindset and they’re literally just looking for a good partner to facilitate it?
Paula: Or is it a mix of both?
Paula: Yeah, it really varies.
Paula: Of course, they like to get our insight.
Paula: And they value it.
Paula: But they either have their own internal teams to crunch those numbers and come up with, I guess, the liability of investing in a loyalty program.
Paula: But then there are other times where they are genuinely interested and they want to hear our perspective.
Paula: And for all those C-level executives listening, I think that is the best way, even though you might have your own internal resources, you might hire a consulting company, like I know you’ve spoken with BAME or KPMG.
Paula: So they have a lot of the framework to develop these insights and provide you with maybe these metrics or ROI estimates within their business analysis cases.
Paula: But the IT and service providers also have quite a bit of understanding of really how your program or your strategy and the functional and the marketing and operation side can translate to a successful loyalty program.
Paula: So you don’t have to take everything that your service providers say so seriously and build your program around it.
Paula: That’s not what I’m saying.
Paula: What I’m saying is at least listen to some of the insight that they’re providing.
Paula: And hopefully, whether that aligns with your vision, overall company vision or not, I don’t know.
Paula: But it could be of some help.
Paula: Yeah, yeah.
Paula: It’s another key ingredient.
Paula: You’re absolutely right, actually.
Paula: I’ve always liked that idea of let’s leverage the expertise because we’re investing anyway.
Paula: And the relationship tends to be extremely useful and ideally long term because clearly there is so much work that goes into building these partnerships.
Paula: So yeah, makes sense.
Paula: Now you mentioned some of the sexy stuff, Sid.
Paula: So you’ve mentioned machine learning, you’ve mentioned AI and gamification.
Paula: And I would say I have a good marketing understanding of these terms.
Paula: But which of them would you say are the most useful?
Paula: Because I do feel sometimes they are words that are used, you know, literally to, you know, to impress that, you know, I suppose that it’s a comprehensive, innovative solution.
Paula: But in terms of the practical impact and benefit on loyalty programs, which would you say of these areas is the most useful to our listeners?
Paula: And I’ll be completely transparent here.
Paula: So I started off working in the loyalty industry back in 2013, with Comarch in fact, and we’ve been using these buzzwords, like gamification, not AI machine learning so early on, probably in the past five years, but things like gamification, social mining, engagement, for quite some time now.
Paula: And I really do have confidence in these types of loyalty and marketing strategies and tools because there is value there.
Paula: And a lot of companies love to hear about it.
Paula: When I go to these strategy meetings or samurai annual meetings, that’s a lot of what we talk about and what we’re doing.
Paula: But with the hundred loyalty customers that we’re working with and that we’ve spoken to, there’s been very few that have adopted these tools, not just from us, but from other providers.
Paula: Because while they like to hear about it and it’s interesting, to implement it could be cumbersome.
Paula: And we have the expertise to help with that, but it involves a lot of moving parts and other parts of the business as well.
Paula: So a lot of people talk about it, maybe small incremental things, like whether it’s purchase marketing slots on Facebook or other social media streams, maybe doing a social media campaign.
Paula: But incorporating all of this data, all of this social interaction, gamified experiences, incorporating into the loyalty program, there’s been only a few companies who’ve done that really well.
Paula: We’ve been fortunate to work with a few of them, but I think there’s so much room to grow there.
Paula: I’m a big advocate of engagement in social media and social mining.
Paula: So getting that data from social media platforms, incorporating into the loyalty program, and not just having more of the tangible data metrics from them, like transactions and how much they’ve engaged from purely a purchase perspective, but also how are they engaging on the social front, and are they talking about the brand?
Paula: Are they providing feedback through third parties?
Paula: That’s really where you find a lot of the value, because you can reward your customers for things that aren’t necessarily related just to transactions.
Paula: But again, that’s been, I’m sure, you being in the industry, you’ve been hearing that forever.
Paula: When I say forever, let’s say the past decade, because these things, they grow pretty quickly and they evolve.
Paula: But now, they’re slowly getting incorporated, and some of the major social media or technology players are creating loyalty programs, which can be integrated with third party loyalty programs.
Paula: What makes it extremely easy for companies like, let’s say, a large fashion designer or a cosmetic company to integrate with a large social media platform and to push out advertising there, to give personalized coupons or point incentives to customers to engage with their brand and social media on advertisements.
Paula: They can even keep all of that and incorporate all of that into a portfolio or a wallet within that social media platform.
Paula: That’s a major one.
Paula: So, you’re starting to see things like this and it’s been very easy for these companies to adopt these new technologies.
Paula: There’s very little work on their side that they have to do.
Paula: So, I foresee that being the future on the social side and the engagement.
Paula: Then you talk about AMC learning, which is the sexy part.
Paula: And we love to hear about that.
Paula: And a lot of companies have already adopted this streamlining certain operations and processes, big things with drive revenue.
Paula: It can save them significantly.
Paula: A lot of money on the bottom line.
Paula: But for marketing, they’ve adopted small incremental things.
Paula: And what we’ve been doing to give them a taste of what AM machine learning can do, we’re doing these pilots and proof of concepts with them to extract, let’s say, a few years of data, analyze that through our machine learning algorithms, and then provide them with unique insights they’ve never had to their customers.
Paula: So whether that’s being enhanced fraud monitoring, to look for these anomalies that may have happened in certain regions or certain stores, which directly indicate that they were a fraud among their employees, among certain customer groups, or IP addresses if they’re trying to enroll thousands of people at the same time to get some bonus and then sell those points in the black market or the dark web, sorry, not the black market.
Paula: Totally.
Paula: Yes, I know.
Paula: And then also amateur learning for enhanced marketing.
Paula: So this personalized marketing, which again, everybody loves to talk about, how do you actually provide personal marketing?
Paula: I’m not talking about grouping a customer who’s between 35 and 45 and then lives in a particular region in a segment and send them a special promotion.
Paula: We’ve been doing that for 25, 30 years.
Paula: But doing something that could be done in real time and based on rather than two or three attributes within a specific segment, hundreds.
Paula: And that’s what we’re doing with some major retailers right now on smaller scales, like pilots.
Paula: So again, these initiatives can take time and that’s why we usually start off on a smaller scale.
Paula: So for example, with companies that some of the largest automotive makers, largest few retailers in the horrific industry like Costa Coffee, we’re doing a lot of initiatives with them, which are based on our AI machine learning technology, helping identify Costa, which we’re lucky enough to call one of our customers, our global customers, identifying individual patterns in its customer’s behavior, provide offers that are generally aligned with their preferences and where they are and what they need.
Paula: So not only do you get the value from getting additional insight into your customer’s purchasing behaviors, but then you can use that in real time to drive real time interactions, which is really where the value is for these loyalty brands.
Paula: Because especially with companies that close to coffee, where it’s very common for a customer to download the mobile app, do things like pre-ordering, loading their cards with…
Paula: With value?
Paula: Yeah.
Paula: Loading their cards with stored value and then using them to purchase directly from the store.
Paula: It’s very convenient for the companies like this to drive this real-time marketing and personalized offers in an engaging way.
Paula: So that’s really what we see as being more of a sexy, as you put it, more of an attractive and innovative technology, which we’re trying to incorporate in a subtle and intuitive way within our tool set.
Paula: And I would say most companies do, like I mentioned, they do have some access to end machine learning technologies.
Paula: But if you’re really able to leverage your providers who provide you, if you’re really able to leverage your providers’ capabilities and technologies to enhance the overall value adds for the customer, I strongly suggest that because, of course, you can develop these technologies internally, but we often see the value just going directly with the partner.
Paula: Yeah, I have to say I find that’s a huge relief to hear because, as I said, I hear the terms, I have a rudimentary understanding of them, but I keep coming up with the question of, well, why do I need machine learning and why do I need AI?
Paula: But when you talk about something like, yeah, I’m going to preload some stored value, I’m like, okay, my commercial marketing brain is now excited going, okay, fantastic, can you do that, please?
Paula: So, yeah, that makes much more sense to me than all the data stuff.
Paula: I’m not the data geek, although maybe I should be, but, you know, each to their own, perhaps.
Paula: Yeah, and, you know, that’s why you work with specific people or hire internally to oversee that, that’s their job.
Paula: And just one additional thing I want to add, everybody, and you’ve heard, there’s always buzzwords within like a one to two year period, maybe five or ten years.
Paula: And machine learning has certainly been that across all sectors, industries.
Paula: Yeah.
Paula: However, and sometimes it’s hard to see how it directly impacts your business or your bottom line.
Paula: I like to think about new technologies like electronic or electric vehicles, sorry, electric vehicles.
Paula: And how electric vehicles seemed like a dream 10 years ago.
Paula: Tesla was one of the first providers and they provided this roadster, which was so impractical.
Paula: Yeah.
Paula: You’re like, oh, that’s cute for like, you know, somebody who just retired and needs some, you know, a run around.
Paula: Who’s going through a midlife crisis.
Paula: But now Tesla has penetrated pretty much every market across the globe.
Paula: Yes.
Paula: And they appeal to different price ranges.
Paula: And segments of customers.
Paula: And now you see a Tesla wherever you go.
Paula: And of course, it’s a bit more tangible because you see it.
Paula: And AI machine learning is a little bit more behind the scenes.
Paula: Yeah.
Paula: But this is where technology is going to be taking us.
Paula: And believe it or not, probably every loyalty platform out there within the next two to three years is going to have this built in and any marketing technology.
Paula: It’s going to have some facet that’s being managed by AI machine learning.
Paula: And maybe you don’t understand it, like yourself and myself, because I can talk about it.
Paula: But when you go into the inner workings, God knows I’ll get lost in a second.
Paula: But at the end of the day, it’s going to be there.
Paula: And it’s going to be driving these very intimate customer experiences, which is going to be driven by that data.
Paula: And just circling back to the beginning of the conversation, that data has been for the past 50 years, we’ve been saying it.
Paula: But now more and more, as we have more access to it, and we’re able to give incentives to get additional data from our customers, and they’re willing to provide it for some discount or tangible reward.
Paula: That’s what’s really made AI and machine learning interesting for everybody.
Paula: Yeah.
Paula: And yeah, somebody made a funny point there a couple of weeks ago when he was, I suppose, challenging our fascination as an industry with the whole data and mining data and gathering insights.
Paula: And what he basically said is, look, you know, I’ve been married to my wife for 25 years.
Paula: I still don’t know what she wants for Christmas.
Paula: So, you know, how on earth is your algorithm going to tell me?
Paula: And I thought that was hilarious, but I love your point.
Paula: I just thought it was genius because we all do it every Christmas going, oh my God, what am I going to buy?
Paula: And yet, you know, the flip side in the office, we’re talking about how well we know our customers.
Paula: And so there definitely is a challenge to, you know, making it real and making it useful, which is what I’m hearing.
Paula: But what I like what you’re talking about, Sid, is the social mining, because I think that’s where we all, I think, very, very, you know, authentically now we realize that every single click is being monitored and, you know, and that that can be to our benefit, which is exactly the point that you’re making.
Paula: So I love social mining.
Paula: Like I haven’t had the good fortune to really work on a program that’s been doing social mining well.
Paula: But I love that you’re talking about it.
Paula: And as you said, if the platforms globally, and we all know who they are, that have access to this level of scale and information, and they’re supporting you guys and your clients to give us all useful learnings, I think that’s extraordinary progress.
Paula: And I mean, this has been around for quite some time.
Paula: That’s why, as I mentioned, we’ve been talking about it and implementing these solutions that are built around engagement and social mining for the past decade.
Paula: One of our first customers we’ve done that successfully with was a well-known airline, JetBlue.
Paula: We were one of the first loyalty providers and technology partners out there to help with this badge initiative.
Paula: And now you’ve seen it across all sectors and industries, especially all airlines.
Paula: But what the real value there is, is how the customers engage with these badges after they get them.
Paula: So do they share them on social media?
Paula: You mean gamification badges, you mean?
Paula: Yeah, leaderboards and okay, got it.
Paula: Yeah, perfect.
Paula: Yeah, and that’s again, so there are a few industries where it works really well.
Paula: What’s the challenge and what we’ve seen with a lot of our customers is that they don’t necessarily work or sorry, they don’t operate in the same environment or of course industry as like an airline or frequent flyer program.
Paula: And the way they engage with their customers are a bit different.
Paula: So how do you use your touch points with your customer, your action points to engage them?
Paula: And can I ask Sid, in your experience, do consumers welcome them?
Paula: Because I’m very curious, genuinely, because sometimes I’m like, yeah, definitely, I really want that dress and as soon as it comes in, let me know.
Paula: But I think there’s a very fine line between over-targeting or making assumptions.
Paula: And I think there are probably cultural sensitivities that, again, with the kind of scale that you’ve got, maybe it’s acceptable in the Netherlands or the US, maybe in Dubai, we’re very fond of retail in this part of the world.
Paula: So what’s your experience of the consumer feedback from these platforms?
Paula: So a lot of the times we go into a specific region where we’re operating, right?
Paula: And we, of course, because we are a Polish company, I’m not Polish by descent.
Paula: I am Polish by descent, actually.
Paula: From a long time ago.
Paula: Well done, you.
Paula: It’s a happy coincidence.
Paula: Yeah.
Paula: So when we start operating in a specific region, of course, we consult with local consultants.
Paula: We hire local resources and that helps.
Paula: So we tend to have an idea of what works and what doesn’t work.
Paula: But when we’re dealing on such a global scale, a lot of times the nuances of doing business or retail behavior or customer interactions and what’s accepted and what’s not, it could be on a business-by-business basis within the respective industries.
Paula: Because again, on the frequent fire programs, a lot of times there’s just industry benchmarks globally that work, like the lounges, VIP access, maybe how often the customer, these frequent fires engage, their levels of engagement are significantly higher than other retail.
Paula: So typically we rely on local resources to understand that.
Paula: But then as we go into the business and we speak with the C-levels, who know the best and know the region’s best, we talk to them very candidly and we say, listen, you guys know your business.
Paula: And this is something I heard, I remember our CEO Yanush Philippiak, we were with the CEO of Natura, which is the top five largest cosmetics company in the world.
Paula: And we were talking about strategy and ways to enhance the program.
Paula: And at the end of the day, he said, listen, you know your program and you know your customers best.
Paula: We, of course, have a lot of insight and data that could help you add value.
Paula: But we rely on you.
Paula: And that’s typically how we operate.
Paula: We have workshops where we try to understand what a customer experience is going to provide.
Paula: If they’re trying to do something a bit more innovative or cutting-edge, we certainly support them and we tell them what global benchmarks are there, what great examples have we seen within their industry, a marketing program, approaching their customers in a more dynamic and engaging way.
Paula: But we usually rely on the customer to give us that framework.
Paula: Then we start providing, with your technology stack, with the tools we have, what we can suggest, or a logo.
Paula: Then we can tweak that as we go along and we can try things like, maybe if it’s a cutting-edge technology or a way of engaging with the customers that may seem a bit forthcoming, then we can do that in a piloted scenario.
Paula: So if they have multiple locations or maybe we just want to try on the digital front on the website or on the mobile app, we can then choose a very select group of customers or sites, locations, and then try that and see how it works and see if there really is any interest there.
Paula: So again, we start off by the region hiring locally, working with local vendors and consultants, and then of course going to the customer and trying to understand what they want, who their customer is, and then how we can help.
Paula: Okay, love it.
Paula: Yeah, yeah, it makes sense, you know, and I like the idea of pilots because again, you know, so many companies, you know, there’s just too much at stake to make big decisions without having that reassurance, I suppose, of, you know, let’s build it, let’s try it, and then roll it out.
Paula: So it makes an awful lot of sense.
Paula: Yeah, and just further to that point, and other ways that we’ve seen it is sometimes when these companies are against the clock, because a lot of times, because of their budget, because that they’re transitioning between vendors or providers, they have a very short timeline.
Paula: And they say, listen, at the end of the day, we want to do this.
Paula: But January 1st, we need to launch our program.
Paula: And that’s really, it’s tough because you’re coordinating between a lot of moving pieces there, internal IT resources, business resources, there’s financial constraints, and then, of course, we have our own constraints.
Paula: So a lot of times you have to do a staged approach where there’s it’s called MVP and minimal viable product that you have to implement.
Paula: At the end of the day, meet the basic customer requirements.
Paula: And then slowly in a phased approach, introduce these new features or technologies, which could be again, cutting edge, could be maybe in a piloted scenario.
Paula: That’s entirely up to them.
Paula: But just if you, you know, there’s a lot of options out there.
Paula: And of course you could have a gun to your head with the budget or timing.
Paula: But there are ways to work around that.
Paula: And a good, experienced, mature vendor, partner, technology provider, could be able to work with you on that, especially in loyalty like Chrome.
Paula: Yeah, yeah, excellent.
Paula: Yeah, I know I like that.
Paula: Mature and reassuring, because again, there’s just, I’m always like mildly terrified when somebody says we’re going to change the platform.
Paula: I’m like, Oh, my Lord.
Paula: You know, it’s such a huge thing to do.
Paula: So yeah, totally right.
Paula: I need somebody to hold my hand.
Paula: Totally, totally.
Paula: Exactly.
Paula: I want to just go back to something you also picked up on, or you mentioned earlier, Sid, about fraud.
Paula: Because I feel that’s something that a lot of loyalty professionals maybe don’t have time to think about, maybe don’t want to think about.
Paula: But is it genuinely something that you think needs more attention?
Paula: Is it becoming a bigger problem?
Paula: And the reason I wanted to pick up on it, I was at the loyalty magazine conference, the Loyalty Surgery in London last year, and they talked about the dark web, and there was a specialist and expert talking about people trading hundreds of millions of loyalty points.
Paula: And I had no idea that the level of criminal side of the loyalty industry even existed.
Paula: So clearly we can put our best foot forward, we can put our business rules in place, but is there stuff going on that you would sound a warning that everybody listening to this podcast should think about and be looking to maybe think about a bit more in the future?
Paula: Yeah, of course, and that’s a very good point, Paula.
Paula: So one thing that often gets overlooked is how loyalty fraud impacts the customer experience.
Paula: Because if you look at, and I hate to drop names, but Starwoods and Marriott, they had a very rough merger from a technology platform and migration perspective.
Paula: And everybody knows about that, how there were just hundreds of millions of customers, hundreds of millions of members who were impacted by this.
Paula: And first of all, the program was offline.
Paula: And then the biggest thing was, there was a huge security breach for hundreds of millions of customers and their information like passports and sensitive data was released into the web, into the dark web.
Paula: You go on the dark web and then you can search people’s names or programs.
Paula: And you can find valuable information from them.
Paula: You can pay pennies on the dollar for their, for like a thousand points or a thousand dollars worth of points.
Paula: And knowing this and being a customer of a company like Starwoods or Marriott, that could be troubling.
Paula: And they’re not the only one, believe me.
Paula: I was just giving an example that’s well known.
Paula: There are a lot of loyalty programs out there that have had similar experiences.
Paula: So what we’ve done and again, it varies on industry.
Paula: Because certain industries are much more prone, they have, I like to say, big targets on their back for loyalty fraud.
Paula: Especially ones where there’s greater amounts of transactions and more engagement with the end customers.
Paula: If you give your customers or programs any incentives to share data, to sign up, getting a few hundred points, which may be worth 50 cents, a dollar, two dollars, three dollars.
Paula: If you give them these incentives to sign up to subscribe to a specific promotion or newsletter, this gives fraudsters, which we call them, a lot of room to target your company.
Paula: So what they’ll do is they’ll sign up for hundreds of thousands of newsletters, get those points, consolidate them into one account.
Paula: It can be done.
Paula: And then to sell them on the dark web, redeem it for a gift card.
Paula: And maybe that’s only one fraudster.
Paula: And they might only do it for 500 or $1,000.
Paula: And that’s not going to affect your bottom line as a larger enterprise or even a midsize.
Paula: But you multiply that by hundreds of thousands, and there’s a huge liability.
Paula: So we’ve been working with our loyalty customers, first of all, to identify where the weak points are in their program and based on our experience, the 20 years of experience we have in loyalty.
Paula: And that’s one thing.
Paula: And of course, all loyalty platforms, a lot of them have ways to monitor for instances of fraud and that’s understood.
Paula: But this is what we’re looking for now and we’re using our AI machine learning technology is to look for these anomalies that’s happening within the data.
Paula: So we look for these weak points and then we look at specific customers or profiles or regions and we say, oh, okay, well, this is normal because on this day, it was a very hot day.
Paula: So then everybody decided to go to the beach and for some reason, they were buying a lot of this product and they were deeming their points the next day because they got a special promotion and it was just an anomaly or something that again had nothing to do with fraud.
Paula: But then there are other instances where you can see specific employees behavior within the store and seeing that they’re clearing or deeming hundreds of thousands of points.
Paula: And you can stop those smaller instances of fraud.
Paula: Yeah, that’s a really good point, Sid.
Paula: And fantastic to know that you are, I suppose, supporting clients on all of that because I think what we tend to forget is we’re creating so much value with our loyalty programs as intended, but there is probably a whole new level of sophistication in terms of the possibility of fraud.
Paula: So definitely something that every every loyalty program manager and director listening to this show probably needs to be thinking ahead about.
Paula: So thank you for that.
Paula: The final question I wanted to get into from my side, Sid, was actually some regional activity that’s been going on here in the UAE.
Paula: And listeners around the world may or may not know the brand name ADNOC, which stands for the Abu Dhabi National Oil Company.
Paula: And they recently launched a loyalty program, which is powered by Comarch, which is amazing.
Paula: They are the biggest company in the UAE, so it’s an extraordinary success story.
Paula: But also, I had mentioned one of my favorite episodes recently was with Etihad Airways, to then discover they’re also a Comarch client.
Paula: And of course, now they’re working together.
Paula: So tell us the kind of stuff that Etihad and ADNOC are doing that you’re supporting.
Paula: Well, they’ve done something that we’ve been advocating, especially over the past six to nine months, is relying on local strategic partnerships.
Paula: And especially given that the current environment has changed for buyer behavior, particularly in industries like airline and fuel retail, we’ve really honed in on the point that they should engage with strategic partners, which can add value to the overall program.
Paula: So our two value customers at Etihad, they went ahead and they began working together, announcing this partnership recently back in August.
Paula: And fortunately, we were fortunate enough to help power both of these programs on the platform side.
Paula: And they’ve enabled their customers to essentially exchange points between both programs.
Paula: And this is really the type of synergy that we’re encouraging our customers to look for within multiple industries and their market.
Paula: It’s not always easy to establish these partnerships or these relationships.
Paula: And then, of course, integrated technologies.
Paula: Sometimes it can be very relatively seamless.
Paula: Points can be exchanged relatively seamlessly between the programs.
Paula: And from a technical perspective, it’s not very hands-on.
Paula: But then from the business perspective, it could be a bit more intricate.
Paula: But ADNOC and Etihad, they went ahead and they did that.
Paula: And this is something certainly we’re encouraging.
Paula: And we are very excited to see what comes of this, as it’s a relatively new partnership.
Paula: Again, the collaboration is developing.
Paula: And there’s so much that we see for them in the future, a lot of value add.
Paula: Yeah, for sure.
Paula: And ADNOC is definitely a company I’ve written about.
Paula: And because of the first fuel brand actually in this country to launch a loyalty program, I’m super impressed and obviously watching very closely.
Paula: So hopefully we’ll get them on the show.
Paula: As well, at some point in the future, Sid.
Paula: So definitely we’ll be, I suppose, supporting that collaboration, because at the end of the day, people aren’t getting to fly as much as they want.
Paula: It probably means they’re driving more.
Paula: So it’s fundamentally beneficial to get it on both sides, huh?
Paula: Yeah, certainly.
Paula: I mean, that’s the summer here.
Paula: I know there was a lot more traffic than usual, because at the end of the day, people aren’t traveling or via airplane.
Paula: Everyone’s getting in their cars.
Paula: Our customer value is fuel retail customers, like Exxon Mobil here in the US, BP Global.
Paula: While there’s been some business, there’s certainly a lot of opportunity for engaging with customers, particularly on the loyalty program side, giving them some unique benefits and advantages of rather than taking a flight to their favorite tourist destination, whether it’s driving there or driving to a more local area for their leisure.
Paula: Absolutely.
Paula: Yeah, yeah.
Paula: And I suppose it’s, as we said, times are changing.
Paula: There’s been a lot of evolution in loyalty over the last 40 years, as long as it’s been happening, but everything has been magnified, multiplied, and just, I suppose, transformed almost overnight in the last few months.
Paula: Is there anything else you’ve seen, Sid, from your perspective there in New York with Comarch in terms of behavior changes that you’re interested in noticing or that we should be thinking a bit more about?
Paula: Well, in the US especially in a more urban area like New York, people, as you probably heard and experienced yourself, have been relying on delivery services and you’ve seen so much happening within those industries of larger technology or retailer companies investing in these delivery services.
Paula: Companies like Amazon, for example, who own Whole Foods, a large upscale supermarket here in the US.
Paula: And they’ve had a delivery service for a few years now, but since the pandemic, of course, it’s grown significantly.
Paula: And I would say usually, in Brooklyn, and I will see maybe a few deliveries being handed off, let’s say earlier this year or last year, and now the roads are jam-packed with delivery service providers and Whole Foods in this case.
Paula: But something that’s interesting, they’ve done and they’ve implemented, is they’ve just introduced a supermarket, a new Whole Foods that’s within a mile of another one.
Paula: You know, actually walking distance.
Paula: And what’s unique about this is that I can’t go there.
Paula: And it’s not open to the public.
Paula: It’s really, they have all their food there.
Paula: They have all their products there, but it’s only meant for the online delivery service.
Paula: So it’s this huge, basically, warehouse that they have filled up to meet this new demand.
Paula: Of course, it’s one aspect of the customer relationship that’s changed between companies and service providers.
Paula: Retailers and service providers.
Paula: But in general, we see this as a growing trend.
Paula: So we’ve invested quite a bit of our resources in things like pre-ordering and pick up at locations via mobile apps or digital technologies.
Paula: So you can order on the go, pick it up curbside, which we call here, and they come and deliver it right to your car.
Paula: There’s a lot of moving pieces to that.
Paula: It’s not like that happens overnight.
Paula: And depending on the product set that you have or the services you’re offering.
Paula: So we certainly see a lot of movement there.
Paula: And it’s from our perspective, it’s been a rush trying to meet the demand for that.
Paula: Again, we’re working with some of the more well-known companies out there who say, listen, if we’re losing out on market share, it’s do or die.
Paula: So they’re putting all their effort, their best foot forward in adopting these new technologies or enhancing the existing technologies they already have to meet the new demands and new dynamic of their customers.
Paula: Yeah, yeah.
Paula: Oh, it’s super exciting, Sid, my goodness.
Paula: And do you know what I love is that you do have that kind of global perspective of, yeah, that’s what’s happening in Abu Dhabi, this is what’s happening in Brooklyn and, you know, the South America piece as well.
Paula: So is there anything else that you wanted to mention from your perspective before we wrap up?
Paula: No, I think that just about does it.
Paula: I think we hit all the major points, and I’m happy with it.
Paula: Wonderful, Sid.
Paula: Well, listen, I have to say, it’s been super fascinating talking to you.
Paula: I’m really hoping that we can do lots more of these conversations going forward.
Paula: I know Comarch, in fact, just from talking to lots of loyalty program managers over the years, Comarch has often hosted events.
Paula: When physical events were allowed, in order to do a lot of this kind of collaborative and shared learning, I think often in Poland and obviously at different events around the world.
Paula: And indeed, I know you do a lot of speaking engagements yourself, Sid.
Paula: So looking forward to working more closely with you.
Paula: And just want to say thank you so much, Sidney Dunn, Client and Business Development Director for Comarch in the Americas.
Paula: Thank you so much from Let’s Talk Loyalty.
Paula: This show is sponsored by The Wise Marketeer, the world’s most popular source of loyalty marketing news, insights and research.
Paula: The Wise Marketeer also offers loyalty marketing training through its loyalty academy, which has already certified over 170 executives in 20 countries as certified loyalty marketing professionals.
Paula: For more information, check out thewisemarketeer.com and loyaltyacademy.org.
Paula: Thanks so much for listening to this episode of Let’s Talk Loyalty.
Paula: If you’d like me to send you the latest show each week, simply sign up for the show newsletter on letstalkloyalty.com and I’ll send you the latest episode to your inbox every Thursday.
Paula: Or just head to your favorite podcast platform.
Paula: Find Let’s Talk Loyalty and subscribe.
Paula: Of course I’d love your feedback and reviews and 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.
