#225: Insights from the "2022 Global Report on Loyalty Marketing & Rewards Programs"

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.

ŁUKASZ: Thank you.

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: Hello, and welcome to episode 225 of Let’s Talk Loyalty.

PAULA: A discussion with our friends in Comarch, all about their 2022 Global Report on Loyalty Marketing & Rewards Programs.

PAULA: A research report they conducted in quarter one of 2022 with Forrester Consulting and 549 loyalty marketing leaders around the world.

PAULA: I’m joined today by Comarch’s Łukasz Słoniewski to discuss the key findings of the report, such as the key issues that we as loyalty marketers really struggle with, what their most popular loyalty program offerings are right now in 2022, as well as their plans for the next five years.

PAULA: I hope you enjoy listening to Comarch’s latest insights on the loyalty marketing industry and how they believe our programs will develop in the months and years to come.

PAULA: So, Łukasz, joining me today from Warsaw in Poland for Comarch.

PAULA: Welcome to Let’s Talk Loyalty.

ŁUKASZ: Thank you for having me.

ŁUKASZ: I’m very, very excited.

PAULA: I know you’ve been a very long time listener and advocate of the show, Łukasz.

PAULA: So, I want to say a huge thank you even before we start for all of your support.

ŁUKASZ: That’s correct.

ŁUKASZ: Thank you so much.

ŁUKASZ: I’m really a big fan of that podcast.

PAULA: Oh, there you go.

PAULA: So it’s very exciting to have you on board as a guest now today.

PAULA: We have some wonderful research to go through that I know you’ve been leading on behalf of Comarch as the business unit director.

PAULA: So we’ll get into exactly your roles and responsibilities.

PAULA: And of course, you’ve been doing this with Forrester.

PAULA: So wonderful to see them involved with this research report as well.

PAULA: But before we get into talking about the report, please tell me, Łukasz, what is your current favorite loyalty program?

ŁUKASZ: Oh, my current favorite loyalty program is one of our clients’ program, which is Costa UK.

ŁUKASZ: And why I like it very much, because of a couple of things.

ŁUKASZ: First of all, it is how the loyalty program should be.

ŁUKASZ: So it’s not only about rewarding people for their actions, but it’s about making the whole customer journey, brand experience much nicer.

ŁUKASZ: The whole process of interaction with that brand, much faster, much more comfortable.

ŁUKASZ: So basically, because the loyalty program, there is a base for many other actions, including pre-ordering, payment, and so on.

ŁUKASZ: It’s just a great center of that customer journey.

ŁUKASZ: And because it is like the whole rewarding scheme is also very well blended with the strategy of the brand.

ŁUKASZ: So it supports also the sustainability.

ŁUKASZ: You get double points when you come with your reusable cup.

ŁUKASZ: It kind of like plays well with what the brand message is, what they really want to achieve, the values that they want to pass to the clients and so on.

ŁUKASZ: So this is really great.

PAULA: Wonderful.

PAULA: Well, that’s a superb example, Łukasz.

PAULA: And first of all, congratulations on winning a client like Costa Coffee, especially in such a mature and competitive market like the UK.

PAULA: I can only imagine how competitive that tender was in terms of choosing a partner.

PAULA: So extraordinary to have that case study.

PAULA: We’ll definitely have to get them on the show.

PAULA: But what I wanted to, I suppose, comment on from, you know, a user’s perspective, and I’ve always been on the brand side, as I think you know, I really love to hear when a program is delivering across such an incredible variety of business objectives, as you’ve highlighted there.

PAULA: And the experience that I’ve seen, Łukasz, actually came from, I think it was actually in China, particularly, where most of the brands there are very clear on this idea of, you know, they tend to have super apps, for example, in China.

PAULA: And exactly what those super apps are doing, as you said, is giving the customer multiple reasons to engage.

PAULA: Because I think what we’ve all experienced as program owners is, it’s difficult to get people to download an app if it’s just for a loyalty program.

PAULA: Because actually, I’m super busy, and I have already got a lot of apps on my phone, but it sounds like Costa were very clear that they needed these multiple business objectives in order to justify getting their customers to connect with them in a digital way.

ŁUKASZ: That is correct.

ŁUKASZ: That is perfectly summarizing the challenges of those marketers today.

ŁUKASZ: That if you want to build that digital connection with your members, what they care about mainly is the usability.

ŁUKASZ: So what do I get from that application?

ŁUKASZ: And it cannot be, as you said, just a loyalty points or coupons.

ŁUKASZ: It needs to give something more.

ŁUKASZ: So this is exactly what the conscious brands are doing, like connecting multiple services.

ŁUKASZ: If we’re talking about the fuel retail, pay at pump, pre-order stuff, get the messaging, release or book your EV charging spot.

ŁUKASZ: This is also playing a great role in supporting that digitalization of the business.

PAULA: Wonderful.

PAULA: Yeah.

PAULA: And everyone talks about it, Łukasz, but it’s not easy to achieve.

PAULA: So again, super exciting that Costa have managed to get to make that progress.

PAULA: So I know you have a huge years of experience, in fact, as a consulting director, specifically within Comarch, but very excitingly, you’ve moved in now to more of, I suppose, a product development role for the whole business unit around the new Loyalty Marketing Cloud.

PAULA: So tell me, how is that new role going for you?

ŁUKASZ: Yeah, it’s very nice, actually.

ŁUKASZ: It’s completely different because so far, I was more like helping our clients or potential clients in how to use various loyalty tools or marketing techniques to achieve their goals, which actually was a very nice experience.

ŁUKASZ: Right now, I moved more to, as you said, the product management, product delivery.

ŁUKASZ: So as a business unit director, I’m responsible for both creation of our newest loyalty cloud platform, but also the whole go-to-market strategy.

ŁUKASZ: How do we market that?

ŁUKASZ: How we pass that new brand message to potential clients, to the market?

ŁUKASZ: How we build our market?

ŁUKASZ: And also the whole delivery and maintenance, which is completely different than this enterprise-sized project that we are experts at for many, many years.

ŁUKASZ: We see that the market is changing, that the smaller and smaller companies, they are ready to also start building a good understanding of their client base, and that’s how we want to respond to those changing needs.

PAULA: Yes, yeah, you’re absolutely right, Łukasz.

PAULA: And it’s a good, I suppose, context for listeners as well to understand why you commissioned this research with Forrester.

PAULA: And for anyone who hasn’t seen it as yet, this report is entitled Loyalty Marketing & Rewards Programs.

PAULA: And it is a global market report for 2022, literally conducted in the first, and a huge sample, actually, Łukasz.

PAULA: I think it was 549 loyalty marketing professionals that you guys consulted in order to get these insights.

ŁUKASZ: That’s correct.

ŁUKASZ: Big thank you to our colleagues from Forrester that actually have this kind of network of companies that they could reach out to and really conduct this study with those who really take care of loyalty initiatives in their businesses.

ŁUKASZ: We had a very good selection of companies, different size, different markets.

ŁUKASZ: We wanted that report to be really showing the good state of global situation around the loyalty today.

PAULA: Yeah, yeah.

PAULA: And I was impressed to see that you have great coverage across obviously the US as the largest market, and then all of the German speaking markets in Europe, also France and also the UK.

PAULA: So extremely useful for anyone certainly listening to this show.

PAULA: And even in terms of company size as well, I could see that a lot of these guys, would have revenues between 300 million to $500 million.

PAULA: So actually quite sizable in terms of, I guess, their expertise with loyalty as well.

PAULA: Would that be true?

ŁUKASZ: That’s perfectly true.

ŁUKASZ: So we also have a sample of those smaller businesses, but as we wanted to have mainly those who are already engaged in that loyalty to understand what are their main travels today, what are their main challenges, but also what are their plans, what they want to do, how they want to improve their loyalty with targets that mainly those larger companies, because they are a bit more experienced and a few steps ahead of the smaller one.

PAULA: Yeah, for sure.

PAULA: And I have to say, reading the report, it was reassuring, I suppose, how familiar it is with all of the kind of challenges that did come through.

PAULA: And I think that’s important that the loyalty community is actually quite a small industry, I think.

PAULA: And there’s a lot of kind of shared challenges that we need to learn from each other, to share and to support each other.

PAULA: So maybe just as a starting point in terms of what you learned, Łukasz, what do you find was most striking for you in terms of reading?

PAULA: I think there’s eight different categories.

PAULA: As you said, there’s lots of insights in terms of what people need from loyalty technology, what they’re planning to do with it.

PAULA: But first of all, in terms of what do they struggle with, I think that’s a good starting point to us to understand the mindset of the people that you were talking to.

ŁUKASZ: Yeah, that’s right.

ŁUKASZ: Like if I want to give like one opinion or one idea that come up to me from reading that report, it’s mainly that building loyalty is a process.

ŁUKASZ: It’s a process, and everyone who wants to do that needs to understand that, you know, at the very beginning, probably everyone is very excited about like, well, the nice things we’re gonna be doing, so many of them, and you know, it’s gonna be sparkling and so on.

ŁUKASZ: And then they understand that it’s gonna take time.

ŁUKASZ: It requires a lot of effort.

ŁUKASZ: It requires a lot of knowledge.

ŁUKASZ: And that’s why the whole delivery of that loyalty program is a process that you need to start at some point and don’t be so much focused on how to differentiate, but more on how to set the basics right.

ŁUKASZ: And this is a very good thing for any size of company today, like that they don’t need to compare themselves to the others.

ŁUKASZ: They don’t need to necessarily be outstanding because that might be a tricky situation where you are in a beauty industry, then you see the Sephora program, which is really great.

ŁUKASZ: And then you feel like you might not have enough resources to really build something better, but that’s not really the expectation and that’s not really what you have to do.

ŁUKASZ: What you have to do is to understand what actually that loyalty initiative, loyalty strategy is gonna give you and that if you do the basics right, you’re gonna be already a few steps further with your internal organization and with the understanding of what your client needs and how to respond to those needs and being more agile and so on.

PAULA: Yeah, I think that’s a very important point, Łukasz, and I have very much experienced that.

PAULA: As I said, it’s a very familiar feeling.

PAULA: I think when you do sometimes get the approval within a company, they sign off on an investment, which is usually quite significant.

PAULA: There’s all the excitement and there’s a lot of communications perhaps that are being put together to support your program, sometimes even on TV.

PAULA: So it’s a very visible project internally, but the managing of expectations I think is critical because actually it’s only after the program launches that the hard work really begins.

PAULA: And I think that’s something that you guys are very experienced at supporting your clients to understand that from the beginning so that they can set the expectations internally.

ŁUKASZ: That’s exactly right.

ŁUKASZ: That’s the most difficult part.

ŁUKASZ: And very often we do have a situation in which we agree to deliver or even deliver a number of features that then there is no capacity to really use them because it’s a lot of work to really plan all those activities, make use of all of the tools.

ŁUKASZ: So this is also something that we need to keep remembering.

ŁUKASZ: And the step-by-step approach is the suggested one here.

ŁUKASZ: What is also kind of like important coming out of this report is that actually, we can see that there are a lot of new programs on the market.

ŁUKASZ: So it also shows that bigger and bigger amounts of companies started to invest in that loyalty strategy because we had a feeling that loyalty is with us for so many years.

ŁUKASZ: But I had a feeling that we’ve been always focusing on those big brands, those who really were having a right team, right people, right understanding of what is it all about.

ŁUKASZ: While right now it’s becoming more, even we can call it mainstream, that everyone can give it a shot, try to build something on their own.

ŁUKASZ: And actually, probably because of the pandemics and because of all of the researches that clearly showed that those companies that had a loyalty initiative, had a loyalty program, had a good direct connection with the client basis, it was just much easier for them to survive or to go through the pandemics than those who didn’t have it.

ŁUKASZ: So I guess that was kind of like a pivotal point for the management that it’s really worth to prepare for the unknown and really start building those kind of loyalty projects inside of the organization.

PAULA: You’re absolutely right, Łukasz.

PAULA: I’ve talked before on the show about our industry, and my experience is actually countercyclical.

PAULA: And for example, I got into loyalty marketing literally back at the big recession of 2008.

PAULA: And exactly like the pandemic, it was almost like a light bulb went off for certain brands.

PAULA: And I’m going to say braver brands that realized that when there are so few customers out there, that that’s really when you need to hold on to every single one that you’ve got.

PAULA: So to me, it was actually very reassuring to see how many young programs, I think, particularly less than two years were coming through exactly in this report.

PAULA: So plenty of appetite for our industry, as you said, with plenty of expectations to manage.

PAULA: And for everyone listening, I suppose to feel that they’re not alone if they’ve got a wonderful software platform and haven’t yet managed to fully optimize and use that capability.

PAULA: It sounds like something you see quite regularly, Łukasz, yeah?

ŁUKASZ: Yeah, that’s always, it’s very funny for me that we always or very often, we feel like that’s us that has that issue and on every single level.

ŁUKASZ: Like if we’re talking about sales, marketing, like any area of your business operations, you feel like, okay, all those companies out there are doing so great and they are doing such a nice thing.

ŁUKASZ: And then here we are struggling.

ŁUKASZ: And why are we struggling?

ŁUKASZ: So for those who feel like they are struggling, I can tell you 100% sure most of the companies are struggling with something and especially with managing those expectations and delivering everything that they planned at the beginning around the loyalty.

ŁUKASZ: So yeah, that’s completely true.

PAULA: Yeah, for sure.

PAULA: And also I know the report identified that all of us seem to be struggling with staffing and resources as well as the challenge.

PAULA: So again, I think that’s probably something that we all feel is just in our companies, but seems to be quite prevalent actually.

PAULA: What was the percentage?

PAULA: 20% of companies said that is their biggest challenge.

PAULA: So that’s quite huge actually.

ŁUKASZ: Yeah, that’s true.

ŁUKASZ: And we see that being or happening in every single area of the businesses.

ŁUKASZ: So basically the staffing is the issue everywhere.

ŁUKASZ: And if we’re talking about the still quite niche competence because managing the loyalty is not a super popular thing.

ŁUKASZ: So it’s not like a fail or anything else.

ŁUKASZ: You have thousands of agencies out there.

ŁUKASZ: Everyone can do that.

ŁUKASZ: It’s like a lot of people, like thousands of courses that you can learn on your own.

ŁUKASZ: Loyalty is still quite specific knowledge that you need to have to understand it.

ŁUKASZ: It’s quite complex.

ŁUKASZ: It’s quite niche.

ŁUKASZ: So having the right people who understand and are capable of running efficiently a loyalty program for the organization, this is really difficult.

ŁUKASZ: So yeah, that’s a struggle number one, overall for the whole report.

ŁUKASZ: So that’s true.

ŁUKASZ: That’s the number one issue for those who are already running a loyalty program, loyalty, some kind of loyalty strategy, because we shouldn’t kind of limit that to some kind of point program or reward program.

ŁUKASZ: We’re talking about anyone who’s having some kind of loyalty strategy.

ŁUKASZ: And then the second one and the second and the third one are quite close to each other, and they are from the same space.

ŁUKASZ: So then the biggest issue, the second one is delivering consistent experience across the patch points.

ŁUKASZ: And then the third one is understanding the customer interactions across patch points.

ŁUKASZ: So what does it mean?

ŁUKASZ: From my perspective and from my experience, that’s a very important knowledge that you can take out from that report.

ŁUKASZ: If you are thinking about building a loyalty strategy, that you cannot only think about the rewarding part of it.

ŁUKASZ: Because very often when we are thinking about the loyalty, we’re thinking about, okay, so how are we going to appreciate those people?

ŁUKASZ: How they will be rewarded for which kind of activities?

ŁUKASZ: Then, you know, are we bringing some levels, tiers, statuses within the program?

ŁUKASZ: Like this is our main area of concern.

ŁUKASZ: But then when you start running that loyalty initiative, you see that there’s so much more around the communication.

ŁUKASZ: There’s so much more around the understanding of what those people are doing, understanding what the customer journey.

ŁUKASZ: So when you are planning those strategies, when you’re organizing a loyalty project, you need to look at it from a much broader perspective, like the complete customer journey management.

PAULA: Yeah, you’re absolutely right, Łukasz.

PAULA: Yeah, there’s a lot more than anyone initially appreciates.

PAULA: And one of the reasons, I suppose, I’ve always loved being a consultant.

PAULA: As you know, I don’t do that anymore.

PAULA: But again, working with people like yourselves, there’s so much expertise to tap into.

PAULA: And for me, that was always important when I was client side to have, again, that support because I didn’t have it internally to access it externally.

PAULA: So you guys certainly provide a huge role in that.

PAULA: And just because you touched on, we don’t want to just simplify to loyalty as a program that has a points currency, for example.

PAULA: Can you talk us through what you learned in the report about what are the most popular functionality that this report showed are being used by all of these incredible 549 loyalty leaders?

PAULA: And at the moment, and then of course, we’ll look at what they plan to do as well in the future.

ŁUKASZ: Mm-hmm.

ŁUKASZ: Yeah, so actually that was quite unexpected because we asked all those professionals what they would be looking at right now when they are choosing the solution to run their loyalty initiative.

ŁUKASZ: And there were a lot of options for them to choose from, including different features, functionalities, and so on.

ŁUKASZ: But actually what was the main factor was the capability to integrate with different platforms, which is quite maybe unexpected, but it shows also another struggle that potentially those people had in the project.

ŁUKASZ: Because if we’re talking about understaffing in the loyalty marketing teams, probably the same understaffing happens in the IT team.

ŁUKASZ: So whenever we’re talking about the project where this loyalty solution needs to connect, and it needs to connect with other tools like marketing automation, like CDP, CRM, transactional systems, that’s where the problems start.

ŁUKASZ: Because the capacity of those IT teams are limited.

ŁUKASZ: There’s always many projects, many things to do.

ŁUKASZ: And then it’s all about the prioritization.

ŁUKASZ: It’s all about the people fighting internally for the time of other people.

ŁUKASZ: And this is a big issue.

ŁUKASZ: So this is the number one actually capability of the loyalty solution that those people who are running loyalty would be looking at today.

ŁUKASZ: So that’s kind of like a good hint for those who didn’t start or are in such a process right now.

ŁUKASZ: What is the next one is definitely the personalization.

ŁUKASZ: Personalization of promotions, of offers, communication, which also kind of resonates with this issue that we mentioned.

ŁUKASZ: So actually inability to communicate omni-channel in a proper way, in a personalized way.

ŁUKASZ: So there’s definitely some issue there.

ŁUKASZ: I strongly believe that it’s very heavily connected with this inability to connect with the marketing automation tools that are already used by the organization.

ŁUKASZ: That there’s, it’s once again, some kind of silo thing happening.

ŁUKASZ: That there’s one team operating one tool, the other team operating the second tool.

ŁUKASZ: And there’s obviously, they understand what needs to be done, but then the capacity to do it is limited.

ŁUKASZ: So it takes time, you know, like there are different priorities on different sides.

ŁUKASZ: So that might be, that might be an issue because of that.

ŁUKASZ: Then also there’s the zero-party data collection.

ŁUKASZ: That’s the important thing.

ŁUKASZ: Even more important, even more important recently, because as we know, the cookies might stop to be supported.

ŁUKASZ: The ability to actually track customer data, customers without their full, let’s say, consent or awareness, is going to be probably ending, so the more they tell us about themselves on their own, it’s very important.

ŁUKASZ: So those are the elements that are the ones that are actually considered very important by those loyalty marketers today.

PAULA: For sure, and the other thing that I think is important, given those priorities that these professionals are identifying, is it’s one thing to understand that you need this integration when you have a single brand loyalty program, but also increasingly what I was really impressed to see, and certainly what I’m hearing as well, Łukasz, from my interviews, is the increasing appetite to expand loyalty programs across multi-brand, certainly in groups of companies.

PAULA: Obviously, coalition as a model is extremely popular.

PAULA: So that type of integration becomes even more complicated if you have multi-brand more than just even one single brand.

PAULA: Would that be fair to say?

ŁUKASZ: Yes, definitely, definitely.

ŁUKASZ: What is even more interesting is that we can see a large appetite for building those coalitions, not only in the B2C, because that’s something that we’ve seen for many years already, but also in the B2B area where those loyalty programs are not that well developed yet.

ŁUKASZ: It’s still kind of like a more developing market, but we see it’s developing with a good pace and in a good direction.

ŁUKASZ: So there’s a lot of plans around connecting multiple brands in those B2B loyalty programs.

ŁUKASZ: So not to consumers, but rather to business partners, professionals who really sell or are some kind of part of your strategy as a brand.

PAULA: Yeah, totally.

PAULA: And I’m glad you mentioned that, Łukasz.

PAULA: I meant to mention it at the very beginning because we’ve already obviously agreed that loyalty is a really specialist expertise within marketing.

PAULA: But then B2B loyalty, again, is another very niche area.

PAULA: And I totally agree.

PAULA: It has plenty of room to grow, plenty of interest from lots of people.

PAULA: And also I know the whole area of employee loyalty is also something that you guys are starting to hear increasingly that clients are looking to to explore with their businesses.

ŁUKASZ: Yeah, that’s right.

ŁUKASZ: There’s like, here we’re talking more even not about the loyalty, but the motivation programs, but also the engagement programs for those employees or business partners.

ŁUKASZ: That’s a very fast growing, I would say, market as well.

ŁUKASZ: Definitely, there’s a good understanding, especially today.

ŁUKASZ: And as always, a world is a very connected space.

ŁUKASZ: So we are talking about understaffing, problem to find the right people.

ŁUKASZ: So obviously, companies are looking at ways to improve the efficiency of the employees and also connect them to the place, to the work they are doing, to the community of other employees.

ŁUKASZ: So this is what all those programs are about mainly.

PAULA: Yeah, wonderful.

PAULA: Yeah, I was just talking to a huge retail brand yesterday in the UK, Łukasz, and they were saying exactly the same, that all of their employees are on the exact same loyalty program as consumers, but with added benefits.

PAULA: And I think that’s a very clever strategy that lots of us really need to be thinking about, first of all, to make sure that the point of sale staff are familiar exactly with using the loyalty program.

PAULA: And of course, they’re excited about it, because I think that’s always the challenge when we launch something again is we might be excited in marketing, but point of sale, there’s a lot of, I suppose, ideas and campaigns they see coming and going, and you really want them to drive your loyalty program.

PAULA: Otherwise, it just won’t be successful.

ŁUKASZ: I cannot agree more.

ŁUKASZ: Having your staff as the ambassadors of the program is the best thing you can do.

ŁUKASZ: And if you find a formula for that, you found the Holy Grail, basically.

PAULA: Great, great, super.

PAULA: My favorite area, I suppose, is understanding the loyalty program offerings, Łukasz.

PAULA: And it’s amazing how much difference there is coming through in this Forrester report with what is currently being offered.

PAULA: And I was surprised to see Cashback actually coming out as the main one, mainly perhaps or maybe driven by the US, I think, is more driven with that particular offering.

PAULA: But some super exciting stuff coming up in the future.

PAULA: So would you mind just talking our listeners through what are the offerings that are currently popular with the audience that you’ve been researching and what do you see coming in the future?

ŁUKASZ: Yeah, sure.

ŁUKASZ: So what are the priorities for our audience around that loyalty?

ŁUKASZ: This we need to consider separately for those B2C programs and B2B programs, because we’ve run this research having both types of businesses and both types of loyalty programs.

ŁUKASZ: And actually here we see quite strong differences between those answers.

ŁUKASZ: So as the rest of the questions and answers, we could generalize and then look at them as a whole.

ŁUKASZ: Here we see a big difference.

ŁUKASZ: So in the B2C, this sector wants to mainly, are planning to mainly add some gamification elements and some other fun ways to collect some more zero-party data to improve the personalization.

ŁUKASZ: And they also are planning to add the value-based rewards.

ŁUKASZ: This is an important factor for them, which basically means that even though we are, you know, we see the gamification as a concept with us for many years, still there are a number of programs that didn’t have a chance to implement those techniques appropriately, but they see them valuable.

ŁUKASZ: So this is like also something that comes out from this report.

ŁUKASZ: And we internally, we call it, you know, reality versus dream.

ŁUKASZ: Hello, because you’re dreaming a lot at the beginning.

ŁUKASZ: And then the reality is that you deliver 30% of that.

ŁUKASZ: So this is like a good example of that, because we’ve been implementing those first gamification projects probably even seven, eight years ago.

ŁUKASZ: Like we started with JetBlue in the US with the very popular badges program at the very beginning.

ŁUKASZ: And we are testing those different techniques like leaderboards, like mini games, some competition type of promotions, and so on and so on for all those years.

ŁUKASZ: But still we see that it is a priority list for many, many B2C loyalty program operators, which means that they see it works.

ŁUKASZ: They see that it could be effective, especially if we’re talking about engaging people to perform some non-transactional activities, like sharing data, watching videos, taking part in a survey.

ŁUKASZ: That’s a perfect way to actually utilize those kind of non-monetary rewarding.

ŁUKASZ: And this is a fun thing to see.

ŁUKASZ: I’m really happy about it because I’m a big fan of video games.

ŁUKASZ: So I really believe that you can copy a lot of those techniques that are kind of like making you spend those hours in front of your computer or console and try to use the same logic and drivers in the loyalty program.

PAULA: And I think that’s part of the move as well, Łukasz, away from transactional style loyalty.

PAULA: And we talk about emotional, but so much of the time, you know, I suppose we struggle to identify what is an emotionally led loyalty program.

PAULA: And I think gamification is a perfect solution to at least create fun and engagement.

PAULA: You know, it doesn’t have to be all heartfelt.

PAULA: It just means it doesn’t have to feel like do this and get that.

PAULA: It just needs to have an extra edge.

PAULA: And I’ve always believed gamification does exactly that for the program.

ŁUKASZ: Yeah, that’s true.

ŁUKASZ: I feel exactly the same.

ŁUKASZ: So the loyalty program should kind of generate those positive moments and those moments of happiness.

ŁUKASZ: So that’s why I don’t like to look at the loyalty strategies as the, you know, point programs that give you some currency then you exchange it for reward only.

ŁUKASZ: Of course, this is very much needed.

ŁUKASZ: And I’m just always saying that this is a base that you need to have to do the whole rest.

ŁUKASZ: Because without it, it’s going to be difficult to even track those activities, make people identify themselves at different channels.

ŁUKASZ: That’s why you need that.

ŁUKASZ: But then what you’re going to do with this data and how you’re going to build on that process is actually what can make it a successful strategy or just a simple rewards program.

ŁUKASZ: So if we’re talking about those happiness moments, like the fact that I can quickly fuel my car without having to go to the cash register and pay for it, but I can do it on my application and it takes me five seconds instead of 20 minutes because it’s like a morning rush and there are so many people and I’m really late because I was supposed to be at work at eight and it’s eight five and I still hope I’m going to be there at eight.

ŁUKASZ: We all have those moments.

ŁUKASZ: So this is where I’m going to feel like this brand give me some kind of happiness comparing to another.

ŁUKASZ: And this is what we should be looking at when we’re talking about the loyalty and the true loyalty strategy.

PAULA: Yeah, yeah, no, it’s a very good example.

PAULA: You know, convenience retail, particularly, I suppose is exploding in terms of the potential for loyalty programs with exactly those very tangible benefits because yes, then I’m extremely grateful to not have to go into the store, as you said, to pay for the fuel.

PAULA: If I can do it quickly and easily in my own car, happy days.

PAULA: It’s a much nicer customer experience all over.

ŁUKASZ: Yeah, yeah.

ŁUKASZ: And then, you know, with all the data that we can capture and the capabilities then to personalize all those experiences and offers, yeah, it just all makes those customer journeys so much more nice for the client.

PAULA: And in terms of the other, I suppose, plans of evolving loyalty programs in the next five years, Łukasz, there was a couple of things that struck me.

PAULA: You know, we talk a lot on the program, of course, about subscription, and that came through quite evenly, actually, and even stronger for B2B.

PAULA: So that was a very interesting insight to see coming through.

PAULA: What did surprise me, though, and I’d love your experience or perspective on this, there was almost equal interest in embedding cryptocurrencies, for example, into the program as there is for subscription.

PAULA: And I would have assumed there would be much greater difference.

PAULA: So let me just check the numbers.

PAULA: So the subscription-based intention overall was 14% and cryptocurrencies straight behind at 13%.

PAULA: So that was amazing.

PAULA: There’s a lot of ambition in that area.

ŁUKASZ: Yeah, that’s true.

ŁUKASZ: So actually, yeah, the number three, four and five, I would group them as exactly something that connects with what we’ve been talking about.

ŁUKASZ: So those marketers, they want to improve the overall experience.

ŁUKASZ: So they are not focusing that much on what type of rewards are going to be there in the program or specific activities, but they rather want to make it a bit broader.

ŁUKASZ: So if we’re talking about the subscriptions, there are those two types of those mechanics here that we see marketers want to implement.

ŁUKASZ: So there’s either a subscription to a specific service.

ŁUKASZ: For example, a good example is BP here.

ŁUKASZ: It’s also our client, and they are using the subscription quite widely in the US and for different reasons.

ŁUKASZ: So there is a subscription for a service.

ŁUKASZ: So this is like expanding the way how you can use the application.

ŁUKASZ: So actually, you can subscribe to the price-matching feature of the application, which means that actually you can very quickly compare the prices of the fuel in a specific distance from the fuel station that you’re at currently, and you’re rewarded if actually the lower prices are found.

ŁUKASZ: So this is quite nice, a mix of subscription to the new service, which is a paid service, which also kind of improves the ROI of the whole loyalty program or the application itself.

ŁUKASZ: It’s fun, it is exciting, it gives those positive moments, so it combines all of that.

ŁUKASZ: While the other type of subscription is more responding to how behaviors are changing, behaviors of consumers.

ŁUKASZ: So we’re getting used to actually pay for something once and then consume as much as we want, like with Netflix, Amazon Prime, it’s all about that.

ŁUKASZ: So here if we’re talking about, okay, so what do we do with fuel business here?

ŁUKASZ: But the subscription is like, subscribe to one coffee a day.

ŁUKASZ: It’s way cheaper than buying those 30 coffees, but if you’re a professional driver or if you just drive constantly, and you like that coffee, then it might be a very nice thing.

ŁUKASZ: You’re just passing by instead of just buying that coffee somewhere else, you just buy, you take that coffee, and then you just pay once.

ŁUKASZ: It’s even smoother then because it’s like you just take it.

ŁUKASZ: You don’t even need to pay for it, which is very cool.

ŁUKASZ: So we see those different ways of using that.

ŁUKASZ: Then there are also experiential rewards.

ŁUKASZ: So again, like we see that people, that behaviors are changing and also the generations are changing.

ŁUKASZ: So the consumers, or we are starting to have Gen Z as consumers, which are much more about the experiences, not owning things.

ŁUKASZ: So also the marketers need to think about like how to please them, how to make the loyalty program interesting for them as well.

ŁUKASZ: So basically, that’s also very interesting that they are also looking in the direction of those experiential rewards, much more than the tangible rewards.

ŁUKASZ: And that might be some kind of like competitive edge as well.

ŁUKASZ: But then, as you said, the cryptocurrency is quite high.

ŁUKASZ: I would say this is for me.

ŁUKASZ: Of course, I can be wrong, but my personal opinion is that this is very much hype based.

ŁUKASZ: So everyone is talking about it today.

ŁUKASZ: There is a lot of interest.

ŁUKASZ: It looks very nice on the slides for the board of directors.

ŁUKASZ: It stands out.

ŁUKASZ: I believe that it’s going to be in the space.

ŁUKASZ: People are going to be excited about it, but it’s only going to work for a couple of early adopters.

ŁUKASZ: They will have this benefit of being the first ones, build a lot of marketing around it, viral marketing around it, because everyone keeps talking about it, like Starbucks with NTS recently.

ŁUKASZ: So obviously, it gives a huge benefit for those who are the first ones.

ŁUKASZ: But then, is it like a really mainstream thing?

ŁUKASZ: Is it really responding the majority of the program members?

ŁUKASZ: I don’t believe that.

ŁUKASZ: Probably there are going to be services that are going to allow you to quickly and easily connect to those places where you can exchange different currencies into cryptocurrencies.

ŁUKASZ: So it’s going to be easier probably to offer cryptocurrencies as a reward, as a currency in your loyalty program.

ŁUKASZ: But will that change the world of loyalty?

ŁUKASZ: I don’t think so.

ŁUKASZ: I feel like it’s going to pop up, it’s going to be very hot, and it’s just going to disappear at some point.

PAULA: Yeah, thank you for your honesty, Łukasz, because that is my experience as well at the moment.

PAULA: It’s a hot topic.

PAULA: It’s important as an industry and I suppose as a loyalty professional within the company to show that you’re aware of the potential for all of these opportunities.

PAULA: But to use the experience we talked about earlier, given the challenges of resources and everything else, we rarely get to build everything that we want to.

PAULA: So I think we’ll be having this conversation again, maybe hopefully next year or who knows in two, three years’ time, and we can reflect back and see if we were right.

PAULA: But yes, I think that the proven business models that we’ve talked about, like subscription, are really going to be much more beneficial, I suppose, to the user and therefore will ultimately change behavior in a way that’s profitable for the business.

PAULA: So we’ll definitely, I expect, get much more attention.

PAULA: So glad to see we’re totally aligned on that one as well.

PAULA: I guess my last question then for you, Łukasz, is there’s so much in here, as we’ve said, for the audience listening today, for them to think about, and obviously we’ll make sure that they can download this Forrester report on the Comarch website.

PAULA: But obviously you had some wonderful objectives yourselves as a software company in terms of understanding what your new cloud-based platform could offer and what would be important to people considering moving or adopting a cloud-based solution.

PAULA: So from all of the things I suppose you learned from this Forrester research, what’s important to people, and I suppose how you’re going to be developing your own product going forward, is there anything that you wanted to mention that really struck you from doing all of this work in order to inform, I guess, your own kind of product development for the next few years?

ŁUKASZ: Yes, definitely.

ŁUKASZ: This report was having this kind of objecting to let us understand what are the real market needs, what are the real struggles that the people are having, because we want to really deliver the solution that solves the problems, the real problems, not the imaginary problems.

ŁUKASZ: So definitely what comes out of this report is that the loyalty is going to be growing as a concept.

ŁUKASZ: It’s going to be much more mainstream.

ŁUKASZ: That’s what we believe in.

ŁUKASZ: So which means that, you know, even if you’re…

ŁUKASZ: What I said at the beginning, any type, any size of the company might start thinking about building a loyalty initiative that they are able to deliver at the moment.

ŁUKASZ: Because there are tools, there are mechanics, there are proven examples of how to do it.

ŁUKASZ: And then if we want to survive, especially in the digital business area, then those companies need to start doing that.

ŁUKASZ: What is also important from our business or product development perspective is that we have reassured ourselves that our strategy to deliver not the loyalty tool, but the loyalty marketing platform is right.

ŁUKASZ: Because the loyalty marketing cloud, as well as loyalty marketing enterprise version, is a set of loyalty management solution, marketing automation solution, and data analytics powered with AI.

ŁUKASZ: Plus all of the touch points like mobile application, website, service agents, application, and so on and so on.

ŁUKASZ: The ability to deliver a complete package of tools that are needed by marketers to run an accessible loyalty strategy seems to be a very important factor.

ŁUKASZ: So the fact that we are able to deliver not only the loyalty tool that you need to connect with all of the other silos inside of the organization, but actually a platform that could simplify the whole loyalty operations within your organization could be a very important factor of selection, I believe, and also simplification and speed up of the implementation process.

ŁUKASZ: Because if we’re talking about delivering that loyalty strategy, then having a single platform that covers both the whole analytics part, understanding of the client, connection of the data from all of the sources, then also appreciation of those clients, reacting to different activities, rewarding those people, but then also the whole omni-channel communication, building, designing those journeys, and so on and so on, this makes it so much easier to deliver the whole concept if we can run and operate it on a single platform.

ŁUKASZ: So currently, yeah, we are reassured that that was the right decision to go that way.

ŁUKASZ: And yeah, we’re even putting much more emphasis on making sure that all those areas of that platform are working perfectly together and also those integrations, you know, like the connectors, native connectors with other tools.

ŁUKASZ: This is something that we are going to be strongly focusing on in the further months as well, just to make sure that we can easily respond to the real needs of the market.

PAULA: Yeah, and I know you already told me all fair as well, Łukasz, for anyone listening, incredibly impressive that there’s already 15 clients who are starting to use this new product.

PAULA: So hopefully, as we said, in the months and years to come, we’ll be able to bring all of those clients on to Let’s Talk Loyalty, talk about the case studies, and hear all of their direct experiences.

PAULA: So that’s a wonderful start for you guys.

PAULA: And also, you’re obviously incredibly technical.

PAULA: I’m definitely not.

PAULA: But what I do love is the human side.

PAULA: So we talked about managing expectations.

PAULA: We talked about expertise.

PAULA: And for me, it’s very reassuring when I talk to you guys to know that there is all of that support available for anybody who’s looking at building, changing or launching their loyalty program, that there is so much expertise available.

PAULA: I think you’re 15 years alone, Łukasz, in your own career with Comarch, aren’t you?

ŁUKASZ: That’s true.

ŁUKASZ: It’s already 15 years.

ŁUKASZ: All the time with loyalty, I really enjoy it.

PAULA: Oh, fantastic.

PAULA: Wonderful.

PAULA: So, listen, Łukasz Słoniewski, Business Unit Director of the Loyalty Marketing Cloud for Comarch, 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 245 executives in 27 countries as certified loyalty marketing professionals.

PAULA: For more information, check out thewisemarketeer.com and loyaltyacademy.org.

PAULA: Thank you so much for listening to this episode of Let’s Talk Loyalty.

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