#344: Retail Loyalty, Coalition Loyalty and Banking Loyalty Trends with Comarch's Piotr Kozlowski

Piotr Kozlowski is a well-known and respected loyalty expert as the Vice President of Consulting for loyalty solutions at Comarch.

With such incredible loyalty industry expertise throughout his career, Piotr is a real leader, with an incredibly interesting global perspective.

In this episode shares his latest ideas on key trends and developments in loyalty worldwide.

Listen to hear specific insights on the evolution of coalition loyalty programs, key trends in retail loyalty, as well as the growth and direction that loyalty initiatives are developing in the banking sector worldwide – a truly global perspective across some of our industry’s key sectors.

With thanks to our friends in Comarch.

This episode is sponsored by Comarch.

Show Notes:

1) Piotr Kozlowski, Vice President of Consulting for loyalty solutions.

2) Comarch.

Audio Transcript

Welcome to Let’s Talk Loyalty, an industry podcast for loyalty marketing professionals. I’m your host, Paula Thomas, and if you work in loyalty marketing, join me every week to learn the latest ideas from loyalty specialists around the world.

This show is sponsored by Comarch, a global provider of innovative software products and business services. Comarch’s platform is used by leading brands across all industries to drive their customer loyalty, powered by AI and machine learning. Comarch Technologies allow you to build, run, and manage personalized loyalty programs and product offers with ease.

For more information, please visit Comarch.com.

Hello and welcome to episode 344 of Let’s Talk Loyalty. Today I’m delighted to be joined for a second time by Piotr Kozlowski, a very well known and well-respected loyalty expert who is the Vice President of Consulting for Loyalty Solutions at Comarch based in Poland.

As you’ll hear my previous interview with Piotr prompted some very interesting insights, so I’ve been really looking forward to hearing his latest ideas on key trends and developments in loyalty worldwide. Today you’ll hear Piotr’s new insights on the evolution of coalition loyalty programs, key trends in retail loyalty, as well as the growth and direction that loyalty initiatives are developing in the banking sector worldwide.

As always, I loved chatting with Piotr as a loyalty leader with a truly global perspective across some of our industry’s most important sectors. So I hope you enjoy listening to my conversation with Piotr Kozlowski, Vice President of Consulting for Loyalty Solutions at Comarch

Paula: So Piotr Kozlowski from Comarch, welcome back to Let’s talk Loyalty.

Piotr: Hello. Good afternoon or good morning, depending where, where we are. Yes. Uh, it’s really great to be here again on the, on your show, so thanks for invitation. No

Paula: problem at all. And I always worry about the Polish surnames, Peter, so I hope I did you justice.

Piotr: No, it’s, it’s cor it’s correctly pronounced, but, so it’s usually, it’s very difficult to pronounce our names, but, but yeah. Yeah, you’ve done

Paula: it well. That’s wonderful. A practice makes Perfect, Peter, so listen to me. It’s been 18 months actually, um, since you were on the show. So, so much has happened and yet so much has stayed the same.

I think when we, we met, met last week, we kind of talked through. Some of the big changes that you are noticing, uh, both from a travel perspective and also with your broader remit, which is super exciting to hear your expanded role within the business. So before we get into all of your, uh, I suppose consulting, uh, observations, Peter, as you know, we always love to start the show now asking about our favorite loyalty programs.

And just for listeners who, who don’t know, you inspired this question, Peter, last time you were on, because you told me your favorite loyalty program and I thought, my goodness, that’s exactly what I want to know from everybody. So given that you inspired the question, I am dying to hear

what is your, I’m, I’m happy I contributed to the, to the way you run the, the, the content on the podcast.

Yeah. Um, yeah, thanks for that question. I think you know that there are lots of great loyalty programs around the world. Uh, of course I’m not a member of many of. , simply geography plays a role here. Yeah. So we, we have a tendency to use those which are, which are very global programs. Mm-hmm. , uh, and I’ve, I think that the program that I really appreciate, uh, for its, I mean value, for its simplicity, um, uh, it’s not just the program, but it’s more importantly how it’s being fulfilled in the, in the channels is, is actually a core program.

So a. Uh, life less. Less. Yeah, exactly. It’s, it’s, I think it’s amazing proposition. Um, it’s, you know, if you look at that, it’s, it’s pretty simple, right? I mean, it’s, uh, the mechanics of the program Yeah. Is sometimes not the one we are trying to, to come up with when we are building an engaging loyalty proposition.

Yeah. But actually this is very simple. This is very transparent. You know, what you get, um, and what kind of value you can extra the program, it’s, uh, embedded to all the channels. Mm-hmm. , that’s the why, really, like, you know mm-hmm. . very easy. Yeah. Yeah. Um, and something that I think is, is, is critical here.

And, uh, with such a big network, with such a large number of franchisees, I think they achieved, uh, a perfection in the way they fulfill the benefits in, at the hotel. So I’m feeling like I’m, wherever I’m arriving, I’m my profile recognize, I’m always getting the, the, the upgrade. And I have to ask. . Yeah. Uh, and all the associated benefits.

So I think, uh, although it’s a, it’s a very, very simple program. Yeah. Uh, sometimes the simplicity. Contributes the most to the value we, we, we are extracting out of, out of that. Mm-hmm. Um, so I would say Yeah. Yeah. A quarter. A quarter this time. Yeah. The last time I was, I was talking about Starbucks rewards, but it was more of a Yeah.

Of a business model, of the loyalty program. I’m not the member of Starbucks Rewards itself. Yeah. But, but here. a Accor, I think has stolen my heart. Yeah, yeah,

yeah. Well, you’ll be pleased to know that Accor coming on the show in a couple of weeks time, Peter. So, uh, we’ll make sure that, um, we get to hear the full story.

We’ve actually interviewed them once before, but what I really like, I suppose, coming from your perspective is you’ve got a global perspective on loyalty. , but yet as you said, you’re, you’re talking from personal experience and I think, wasn’t it Einstein who said something about, uh, genius is, um, you know, stripping things back to their simplest essence, but no further.

So that idea that it’s a compelling proposition that everybody can understand. And particularly I think with the core, they have so many hotel. And one proposition has to cover both commercially and I suppose from a consumer perspective. So, so from my, I suppose, observations and learning about their program, Peter, what is brilliant is, you know, they have that domain, the, you know, at Core Live, limitless.

They’ve got the super sexy assets in terms of the sponsorship side, but as you said, it’s across all channels. It’s wherever I experience their core brand. So really impressive. Yeah,

Piotr: and it goes very well hand in hand, you know, in terms of a, of a choice with a diversification of the brands they are having.

I mean, you can pretty much yeah. You know, be rewarded, uh, whether you’re staying on, on a, on budget at s or whether you’re staying in a premium m gallery or, uh, or, or soit hotels. So it, it, it covers pretty much your private travel and you can be rewarded for your private travel. Yeah. Uh, and also covers your more of a premium space if you, if you are on a corporate.

So, uh, of course that that has to, that has to, uh, uh, come together in terms of what kind of the assets you are having and how you are rewarding for that. So I think that’s, yeah, that’s where they, where they remaster that. Yeah. Uh, and it’s really appreciated. I mean, unfortunately I have, I have fallen from the cliff of the, of the tier members having requalified to my continuum card.

Yeah, they stopped, they stopped the grace periods anymore, so you can totally that that’s something they can improve actually .

Paula: Okay. And I’m sure you’re not the first person to say it as well, Peter, so I know that many of us experienced that. Yeah. Oh, totally. Yes. There’s a lot of people falling off cliffs at the moment.

Yeah. So, uh, so totally get it. And, and, and it’s true actually, Peter Las. Time you were on the show? Um, as we said 18 months ago, and we were still, I suppose, struggling with the implications of Covid at the time. Thank God we’re all in a much better place. I’m not sure if we’ll ever be totally rid of it. Um, yeah.

But from a, I suppose a loyalty perspective, it was really fascinating to hear. You know, what you were seeing globally, both with your travel hat on, because I know you spent, I think it was seven years exclusively and consulting strategically for comark across airlines and hotels and, and obviously airports as well.

And you were broader remit now, so. , I’m gonna dive in with the, the newer stuff because that to me is, is something I have less, um, experience of. And that’s, uh, retail loyalty. Peter, there’s um mm-hmm. so much. I suppose that has changed from, I believe a consumer perspective, um, but also I think trends that maybe we have seen maybe 10, 20 years ago in travel, starting to come through in retail.

So tell us your insights in terms of what do you think is happening in the world of retail loyalty?

Piotr: Yeah, I think, I think very much the, the, the loyalty key, uh, today or across the, across the retail brands are, is following, is following the overall trend with within the loyalty. So if you think a decade ago or 15 years ago, I think majority of the loyalty programs in the space that were focused on retail, they were built around the channel.

They were built around the retailers department stores, um, , even even grocery, you know, grocery chains. It’s, it’s still a channel through which we are transacting. Sure. What we are seeing in a, in a, in a more of a premium retail. Um, we are seeing that, uh, the brands, uh, have been trying to, to build their own channels to, to, to interact with the customers, especially in a, in a fashion retail.

Mm. Uh, in an outdoor retail. Mm. Uh, and, uh, the, the pandemic just propelled that, that most of the, of our transactions moved to the e-commerce. Yeah. And then it’s pretty much a question mark to what type of e-commerce it moved. Did it move to the third party e-commerce? So are we using the. and type of Amazon platforms, or did the brand start to, did brand start to build their own channels, uh, their own e-commerce propositions?

And it looks like many of them actually started to, uh, to build their own capability around, uh, uh, interacting and, and providing transactional capabilities to the customer. And that is also, that kind of evolved to the shift of how, what loyalty programs are focusing at. In the past, we’ve been primarily, uh, building the programs.

For those department stores Yeah. Large retailers. Yeah. Right now we are seeing that there’s a bigger and bigger appetite of the, uh, of the consumer brands directly to build a, uh, loyalty proposition to, to target their, their, their consumers. Yeah. And, and if you, if you compare it, you know, if you think about, uh, Uh, that the travel about the travel industry and why the loyalty programs have been initially established?

Yeah. They were established to put the connectivity between the airline as a brand and the end consumer. Yeah, and to certain extent, I mean, overriding the, someone who owned the customer, which was the, which was the travel agent, right. , yeah. I mean, for, for the following decades, right? Yeah. I mean, the retail has been working with a, with a so-called travel agencies, which were brick and mortar, uh, retailers, right?

Yeah. And now they are, they’re trying to find a, a kind of a bypass. Um, for, with, for their own e-commerce, e-commerce proposition and the loyalty programs to establish relationship directly with the, uh, with the consumer. And we are quite a, you know, we are quite, um, fascinated with the type of the brands that are going toward the direction.

We mentioned retail, but I mean, we seeing the same thing with, with the automotive business. You know, 10 years ago we never thought about automotive business as an area where the low. Program propositions can, can thrive. And we think it’s happening. Yeah, yeah, yeah. Um, so with that digital connected car, we are seeing that the automotive brands.

our first time in that position that they can start talking directly to their end consumer. Yeah. They were, I mean, in reality they’ve been just building their, their products. They’ve been creating them. Yeah. But they didn’t speak to their customers directly. It was a dealership who speaks, who spoke to them directly.

Mm-hmm. with a, with a new connectivity that we have in place. Um, uh, it’s, it’s happening basically the same, uh, the, the automotive brands can talk directly to your end. , they start to build the proposition. Yeah. To actually be able to collect more data about their, their consumers. Mm-hmm. and the role of a dealership is still very important, but it’s not, um, It’s not the blocker between the, uh, between the establishing relation directly between the, the brand and the, and the consumer.

So I think we have a lot of shifting here that is happening. So loyalty programs will basically follow, um, follow that, that trend to work, uh, more directly between the, between the brand and between the consumer. Um, uh, which of course will. Lots of different effects on the, on the, on the retail business, on the, on the real estate business, because let’s put this in, in, in the western economies we are coming to, um, not an end maybe, but to the big shift of, of what traditional retail means.

Paula: Yeah. And I, I really love that you’ve drawn that, I suppose a history lesson for us, Peter, because I was in the airline industry 20 years ago, and maybe longer if I’m honest, but I absolutely witnessed that disintermediation, if we use the, the, the technical term for it. And at the time it was truly, Because, you know, travel agents had all the power.

The airlines were very much, uh, distant as we know, even though the actual loyalty programs, I think started about 40 years ago. Uh, American Airlines for example. Yeah. But I think once the, the benefits of that direct relationship really started to become clear to airlines in particular, then absolutely.

They, they really did decimate the, the travel agency business, um, in, in many countries. And I know new models have emerged, of course, in terms of online travel agencies and yes, you know that there is other models there, but it’s almost amazing as you said. You know, I’ve often thought about it, you know, when I did buy a car, I actually don’t have a car anymore in Dubai.

I’m very happy, um, using a taxi in the metro and everything, public transport, . So that’s a shift in my behavior. But I do always remember. almost being offended, being in the loyalty industry that I was buying this incredibly expensive thing for myself. Uh, and Audi was the last brand that I actually bought.

Now I was buying secondhand, so I won’t pretend though I was buying a brand new, uh, car. But again, I was like, nobody’s even bothering to build this relationship. Even the dealer. Do you know what I mean? It was kind of like they focused on that transaction. They focused on the sale, and then they moved on and they, they didn’t really seem to care that in, I dunno, two years time, three years time, I might have more money, I might have a, a need for a new car.

But retail now,

Piotr: To me, and if you look at the burging power of the players in the market, I mean, the biggest burging power was, uh, in the hands of those who were actually owning a channel. Yeah. Today, uh, this, this, this, this burging power is shifting to those who actually own a customer and own data. Yeah.

Uh, concerning customer. So yeah, I mean, if you look at the travel industry, I mean, it’s pretty much the, the, the times of it in over nineties were, I mean, of course, technology on the one hand to, to transact directly with the end consumer. came together with, of course, the ownership of the data and ownership of the, of the customer.

Mm-hmm. . But if you look at, I think in 1990, approximate, uh, spend of the travel, I mean, airline companies on a distribution cost, were at the level of 12%. Mm-hmm. . Yes. Now they’re arranging between two to 4% on more than debt. Right? Yeah. Yeah. But that enabled also to, uh, to create a new pressure on the, on those who own the channels.

Yes. Which are still relevant, uh, uh, to, to actually deliver more value at the. more reasonable, reasonable cost. Yeah. And it looks like we, we, we, we are going for the same kind of evolution, um, within the, within the retail space. Yeah. Uh, there will be much bigger pressure on a, on a traditional brick and mortar.

Yeah. Um, we still have the intermediaries like, like, like Amazon for instance. And, and, and of course local, local marketplaces. Yeah. But it looks like, um, that the, the brands, uh, the larger brands are realizing. , um, they cannot build their, their, I mean, retail strategy around, around those marketplaces only.

Um, because from being dependent on the department store, they will become dependent on the, on the e-commerce, uh, marketplaces. Yeah. Therefore, they are building direct, um, uh, direct, um, relationships. They’re building direct, uh, on, uh, e-commerce channels. And I think this is the, yeah, that’s what we’ll be seeing for the next couple of years in terms of the evolution of.

of the, of, of the retail and definitely loyalty programs will propel that to, to, to, to some extent. Yeah. Um, uh, from the perspective also that, that this will be one of the best source to Yeah. Uh, to, to collect, uh, the zero party data.

Paula: For sure, and, and certainly again, I’m, I’m noticing my own behavior shifting in that way as well, Peter, because I did go to a department store recently and was browsing around actually for a gift.

It wasn’t even for myself, unfortunately. But I did browse around, you know, a couple of kind of, you know, Upper kind of luxury handbag, uh, departments, for example. And as soon as I showed interest in a particular product, the salesperson who I’m guessing was directly working for that brand, immediately asked for my WhatsApp number to send me more product options, and I was thrilled.

So, What I’m finding is, and I’m sure you have this experience, so I think from a business perspective, you’re absolutely right. The brand sees the direct opportunity of selling through an e-commerce channel, and I’m guessing a lot of the business cases start with that, but then they’re also realizing the relationship and the marketing benefits.

So it’s kind of like that holistic piece to go back to your opening answer. Exactly. Core have managed to get that piece, both the sales and the marketing benefits with the surprise and delight, the zero party data and yeah, so big luxury brands I think are finally realizing, and I guess it’s just amazing that we’ve talked about, it’s been happening for so long in the travel industry that it only feels like it’s coming through now in retail, which is quite

Piotr: amazing.

Absolutely. Absolutely. Of course there were, there were need to be a lot of enablers to, yeah. To. To, to, to deliver that kind of a, kind of a driver to the market? I mean, logistics? Yeah. I mean the, the, the payment solutions, the e-commerce platforms. Yeah. So it looks like, uh, although we we’re sometimes saying that the, the travel industry is a little bit old fashioned actually.

I mean, the travel industry have been one of the pioneer in, in, in starting to sell their services in, uh, in online mode. And, and a lot of the inspiration to other businesses came actually from, from. Totally.

Paula: Totally. And I know we share that passion and love of airlines as well, Peter. So yes, we, we’ll never forget, I love, I, I love that whole industry and I do miss it.

So, but listen, talk to me about data, Peter, because I, I feel like that’s, um, one that a lot of people talk about. I definitely think it has its own complexity. So again, it’s one thing to have an e-commerce transaction, it’s another thing to capture data that can be actually useful. What do you think the, the level of sophistication is in terms of your clients, uh, both in travel or in retail, for example, in terms of their awareness?

Of what they can actually do. Like how far are they on that journey of, of using the data for the benefit of their members rather than just, I suppose, research?

Piotr: Sure. I, I, I think, I think we, we will never reach a, um, a, a destination in terms of, of what we can do with the data, right. So it’s a, it’s a continuous process.

Of course, we are overwhelmed with the data. Yeah. We have, uh, too much data, uh, in, in comparison to what, how we can leverage that, how we, how much we can consume. Yeah. Of course, new, newer technologies will, will come with a. Very strong support in that area. Uh, so, so looking at the, at, yeah, I know it’s, it’s, it sounds like a best word, but of course, I mean, we, we, we see the, the bigger leverage of a, of a machine learning capabilities in a delivering either the personalized offer, either in a, in a customer segmentation, kind of a clustering customers, um, uh, without defining the rules based on which you are, you, you are segmenting them.

So definitely there, there will be a lot of, support from technology field, um, in, in, in consuming data. I think what, what became really clear, uh, uh, in the, in, in all the industries is that, um, uh, Data ownership is today one of the, one of the biggest asset that you, you have in, in, in the company? Yeah. So, um, you know, if, if I, if I look at the, at the past experiences where we’ve been talking with the clients Yeah.

On relaunching a loyalty platform, you know, data analytics and, um, and the, and the. And the reporting aspect, you know, they were kind of a secondary aspect. We were focusing on more of a operational, transactional, uh, uh, things. I mean, today it’s, it, uh, all the brands became very, very aware that, I mean, if they are to build a business around anything they should build around, uh, data, data ownership, and uh, and, and having the data in, uh, in the right depth and in the right.

Paula: Absolutely. And I know you do a lot, for example as well in coalition programs, Peter, so is that changing the dynamics of relationships for, for coalition

Piotr: loyalty? It does. Uh, because I mean, that, that is of course a controversial topic if you, if if, but, but we like those, right. Totally. . Um, I, I, I think, I think, you know, if you look, if you look, uh, a decade ago where we had a big and big grove of the coalition loyalty programs, they were like, uh, as the programs, they were thriving as the businesses.

They were thriving. Yeah. Um, but, uh, they were building their, their position based on the, first of all, providing. Quite a strong, uh, uh, insider network. So, so multiple, uh, players in the, in, in, in the network, they were providing an attractive, attractive, uh, neutral currency. Um, and they have been building their value on top of the data.

Mm-hmm. , the challenge that we, we had of course were that the partners who were contributing with a lot of. Transactions, information about members. They were not owning the data and they were not having enough insights to that data. Yeah. So that has, that has led a lot of the loyalty programs in, in, in coalition space, um, to, to go for a certain even point where the larger.

Partners of those coalitions have realized, okay, we are pretty much buying a little bit blindly the currency. Mm-hmm. , we are, um, buying a certain acquisition of the customer, but not of the customer data, but rather of the customer, um, uh, footfall to, to our, to our, um, uh, outlets or, or simply additional transaction in our e-commerce channels.

Mm-hmm. . Um, and, um, we. We are not extracting enough value out of the coalition program that we potentially could Having our own. Yeah. Or having, or being in a, in a coalition that has a bit more of a, let’s put it this way, democratic or, or equal, equal rights of, of usage of the, of the data. Uh, and I think that led a lot of the big brands to either, Started to rethink their, uh, participation coalition programs.

Yeah. Uh, some of them withdrew. Yeah. Yeah. We, we, we, we, we’ve seen the American example of a Yeah. Of a plenty program where, where the larger brands have very clearly recognized, okay. Yeah. We would be just a kind of a blind contributor of a, of a revenue and the data to, to the larger coalition program, whereas we have enough enough power, we have enough frequency to build our own propositions, and they withdrew.

So I believe the coalition loyalty programs kind of reach a certain plateau, uh, where yeah, they are not growing at a fast pace. Some are in decline. Yeah. But I think overall from a data sharing perspective, that will lead us to, uh, that will lead us to, to, to have, uh, a kind of a new, uh, reshaped models of the coalition loyalty programs where this topic of.

of a, of a democracy inside of the coalition program will be addressed. Um, uh, where, where the, the, the operator of the coalition will not be just draining the, the wallets of the, uh, of the partners, but they will be also in return, providing much more. Mm-hmm. , uh, much more, uh, insights, much more tools to, to manage their programs from as a, as a marketing tool.

Yeah. Um, so this relationship will be much more equal than, than it was in the, in the, in the last, in the, in the last. .

Paula: Yeah. It’s like, um, a maturing of the coalition model, if I’m hearing you. Yeah, definitely. I like

Piotr: that. Definitely. It’s, it’s maturing from both ends. So I think that we, we came to a point where ma in majority in markets that coalition operators have realized that if they want to evolve and, and further grow, grow the, the, that proposition they have.

um, address the, the, the potential partners, the merchants in a much more matured way. They have to, they have to give them much more value. Mm-hmm. and, uh, these merchants have to proceed as value to, to opt in. Um, otherwise, um, this, this creates a, a, a kind of, um, uh, unequal environment in which the merchants are not willing to participate.

Yeah. So I think it’s this, this kind of, uh, shifts that, that happened that, uh, that, that happened in the culture industry. . I mean, we’ll, we’ll bring to the market a new evolved models of the coalition loyalty programs. Mm-hmm. , that that will be bringing more value to, to partners, merchants, and at the end of the day,

Paula: consumers.

Yeah. I really like that actually, Peter, when I think back to my days, you know, running loyalty programs on behalf of clients, as you know, it was predominantly telcos, uh, utilities for example as well that, that I worked in. But I certainly didn’t have sufficient knowledge and Ireland wasn’t really a big enough market, I guess, to, to have a very compelling coalition program.

But I’m thinking of everybody listening to our conversation today. I think it’s really positive for brands to understand that they do have that level of negotiating power, you know? And because the consumer still does value. I suppose simplicity and lifestyle opportunity, I suppose that a coalition program offers.

I think brands are in a very good position to go and, as you said, you know, push the coalition operators because actually they won’t survive if they can’t really offer a more compelling benefit to those contributing merchants. Because I. Yeah, we, we’ve both seen it, I think, high profile, you know, failures in the US market, for example.

So it’s good to hear that these programs are growing up.

Piotr: Yeah. And I think, I think there’s, um, I’m still positive that the coalition loyalty, uh, model, which was questioned for the la last few years, yeah. I think it’s still can it, it still can be, uh, a marvelous way of, of delivering, um, value to the consumer.

it just needs to, uh, some, some level of a, of a, of a reshape of a, of the powers inside of the BROS programs. Yeah. And what, what, what, what kind of a voice, uh, actually the merchants can have in, in, in such a proposition? Uh, so, um, I’m, I’m still a big fan of the coalition loyalty programs. Um, I think in, in some markets they, they will still thrive, but they just need.

uh, shift a little bit.

Paula: Absolutely. And that’s where expertise from people like you, Peter, I genuinely believe is, is the only way for, you know, again, people listening to this show to, to understand those nuances, you know, the dynamics of exactly how the program operator might be thinking and how they can, I suppose, negotiate their way in to a more powerful relationship or a more balanced relationship, let’s say.

I think that does take a lot of e. . And I

Piotr: think, I think, you know, if you look at the, if, if you look at 10 years back, uh, what was the, what was the major asset around which the, um, the proposition of the coalition program was built for partners? It was primarily built around the currency. Um, it was primarily built, I mean, every, every single, every single point issued means that we, we brought the footfall to your, uh, uh, to your, uh, to your outlet.

Mm-hmm. . Um, and of course there were revenues, uh, behind it. I think, uh, in a, in a, in that, let’s say future state, in the next couple of months, years, we will be seeing, uh, a big reshape of that, of that proposition toward merchants. Where, I mean, the loyalty programs will be cam for them a broader marketing tool, let’s put it this way, totally.

Where they would need to provide much more services, much more insights about the consumer, whereas the points, the, that, the currency. Will be just an element that we propelling all, all that business. Yeah. And will become an element of a circulation. So it will address that behavioral aspect of a, of a loyalty.

Yeah. But there, it’ll not be a centric component of the, of the coalition loyalty programs. It’ll be just a kind of a. Circulation assets a feature.

Paula: Absolutely. Yeah. Yeah. And, and I think as well, you know, my, my final thought on it was, again, maybe 10, 15 years ago for a coalition program, the technology was probably inaccessible before, you know, cloud-based, uh, solutions, for example, existed.

Uh, sometimes the coalition operators were the only ones who would. Absolutely at the level that was needed. So,

Piotr: you know, upfront also, the, the barriers, the barriers to, to enter the, the, the, the, the load space were much higher in the past. Yeah. Uh, also from technology standpoint, uh, today they’re much, they’re, they’re much lower.

Yeah. Uh, and, and in order to be successful in, in, in pursuing the, the coalition loyalty strategy, you, you have to deliver much more in terms of a business value than actually just, uh, just, uh, the lower access

Paula: and. Yeah, great insights. So listen to me, Peter, then, your role has expanded geographically. It has expanded across new sectors as well.

So in addition to all of the, uh, the travel stuff that you’ve been doing and continue to do, tell us about the new sectors of loyalty that you’re starting to, to take care of. .

Piotr: So def definitely it’s been, it’s been banking that I was, I was looking at heavily in the, in, in the last few years. You know, uh, banking is an extremely exciting, uh, and the final sector is extremely exciting area for pursuing loyalty because it’s a very, we can call it traditional, uh, space for loyalty programs, right?

Uh, a little bit like travel. So we, we can call that to some extent the loyalty programs, usage of the loyalty mechanics in the, in a, in a banking. . It’s, it’s within the DNA of the, of the banks. Yeah. Yeah. So, so, so that’s, that’s a very, very interesting area where, where I’m looking at and I’m, I’m seeing that, um, there’s still a, the untapped opportunity across, across banks and using the loyalty mechanics.


Paula: what kind of opportunities are they? Give us an insight .

Piotr: Yeah. I, I think, you know, if, if we look at the bank programs as of now, today, they, they are very much focused around one single. Banks, uh, uh, product and it’s a credit card. Yeah. Yeah. So, um, most of us, I mean, depending in which country we, we, we live.

and I think there’s a big difference. We’ll come to that probably. What is the difference between Europe and, uh, I would say rest of the world. Yeah. Um, uh, but, uh, but the most of the programs are built, uh, around, you know, making you swipe the card as many times as possible, uh, and rewarding you for that.

So if you take the, the American programs, middle East per Eastern programs, I mean, the only way to be rewarded sometimes is to. Access the credit card. Credit card proposition. Sure. Uh, I believe that, uh, that makes, uh, most of the, um, European loyalty programs, uh, uh, bank programs, uh, living, I would say in a poverty, let’s put it this way.

Sure. Um, because they cannot, with that approach, they cannot contribute much to the. Uh, to, uh, to consumers, neither to banks. Yeah. Um, whereas, uh, the bank, the, the, the, um, the programs in, in US in Middle East, in Turkey, you know, they are thriving because they are having, uh, uh, lovely margins on, on a, on a merchant fee, uh, and on, uh, it’s driven by the legislation on the interchange rate.

Yeah. So just a comparison, we have 0.2%, uh, emergency in Europe, in European Union. , whereas I think, uh, in the Middle East, or if you take us, it’s between two to 3% merchant fee. So Yeah. Wow. That, that makes the, uh, the potential proposition how much you can give us in, in terms of a reward to, to member. Uh, that makes a, a huge difference.

Right. Um, that’s why the loyalty programs in, in, in Europe do not contribute much to the, to the acquisition of customers into banks. Yeah. To retain their customer. But I believe, um, uh, both of the, of the regions, so Europe and the rest of the world, if we put, if we, if we, if we categorize that way, the, uh, and then the world from perspective, the interchange rate, I think still that there’s a lot of the untapped, uh, potential by.

Addressing the other domains of the, of the banks, other products and propositions with the, uh, with the, with the rewards. So when I look at my, at my activity in a, in a, in a, uh, with, with any bank, I mean, I’m having a mortgage, I’m having loans, I’m having insurance with the bank. Yeah. Um, I’m having savings.

Uh, I’m doing investments, but I’m only being rewarded for swiping my card. Yeah. So I am not being motivat. by any other factor, but than just convenience. Yeah. To, to continue to use the same bank or if I see the opportunities, I switch the banks quite easily. Yeah. For a variety of different products. So, uh, , I think this is the, this is the way, especially the European banks should look like, how they can leverage the mm-hmm.

the loyalty mechanics. Mm-hmm. , um, I mean the, probably the, the swiping the cart can be just a, a nice addon. Yeah. But actually the, you know, a lot of, uh, products they are, they’re selling, they are of a very high margin. Yeah. If you take the, the, the short term loans, if you take. , if you take mortgages, if you take the currency conversions, these are very high yield products.

Yeah. I’m not being rewarded for none of it. So, uh, so that’s interesting. On the other hand, if we look at those very rich loyalty programs in the us, in the, in the Middle East, in Turkey, in Southeast Asia, I mean, are focusing very much, uh, around around the credit. . Mm-hmm. , uh, it makes them putting in the comfort zone because their revenues are, are, are pretty much coming in for the credit card business.

Yeah. But it looks like they are not fully leveraging the, the opportunities which are with their other bank products, which are also at a very high margin. Uh, and if, uh, if, if you find the right model of, uh, of rewarding for. Mm. They then the loyalty program can be an even greater contributor to the bank business, uh, of, of, uh, uh, of Yeah.

Customer retention. Yeah. Acquisition and, uh, and a cross sell as well of their

Paula: products. . Absolutely. And, and it’s interesting Peter, thank you for that. Um, I’m certainly also starting to hear these conversations being had about rewarding the entire banking relationship. And, you know, my own kind of, you know, assumptions are that as legislation.

Forces the banks to make it easier to switch, you know? So certainly, again, back to Ireland where I would know, um, you know, most, um, customers would now be, uh, less nervous if they did want to switch a bank, for example. Yeah. But it, it, it has to be facilitated. So, so I suppose the, the, um, History of, you know, all of the complexity of changing your, your lifelong banking relationships, all the direct debit setups and all of that piece that nobody ever wants to deal with.

I suppose that’s being addressed by legislation. So I suppose there, there must be increased churn. Again, I haven’t worked in this industry, but it’s really good to hear that they’re starting to think, well actually, if we do have those margins, , why would we not start to focus on the retention piece?

Because Absolutely. To, to me it’s inevitable that people will, because I think there’s a lot of resentment around the complacency in banking relationships. I mean, for me, that’s my experience. Um, and, and maybe it’s just because of the complexity and the, and the costs involved behind the scenes, but I’m very rarely.

Very loyal to my bank, uh, with, you know, surprise and delight and joy, and the same way I would with my airline loyalty program. Uh, am I, am I unique in that ?

Piotr: I, I, I think, uh, the, the, there is a bigger dynamics right now in terms of switching the, the, the bank programs. It depends on the country. Yeah. So, so, uh, if, if we’re talking about a country where I’m right.

Poland. Yeah. Yes. I mean, I, I, I can pivot very easily between the banks. Okay. And depending on the product I’m using, I’m having savings in other bank account and I’m having my mortgage in other bank account, and I’m having a credit card in a different bank account. Okay. Um, eh, so I’m not loyal to any of those brands effectively.

Okay. Yeah. Yeah. I’m not, and so, so I think it doesn’t have to go as far as churn. Yeah. I think we are having a big cost of lost opportunities by. cross-selling the products in the got and the bank. Okay. I mean, yeah, if I would be rewarded if I’m buying my travel insurance, I would, I, why not to buy it with, with my local, with my, with my bank where I, where I have my, like a dominant bank account.

Um, there is no such a, such a motivating factor. So I go to, to other, like online insurance companies. I’m buying my travel insurance. Yeah. And that’s what, what, what consumers do with, with every type of the product. Of course that depends. There are some, I would. , yeah. Markets where there is a much more, we can call it e established or historically conservative, uh, consumer base.

And it’s driven by the. also historical position of banks. Yeah. Mm-hmm. . Okay. UK could be an example. Ireland probably as well. Yeah, yeah. Yeah. Where, where you’ve got, where you’ve got very few players and people tend not to switch the banks. Yeah. Yeah. Uh, but there are, but there are, there are economies where, where there is a much bigger dynamics, there’s much bigger competition in the banking sector.

Okay. Which is res, which is a result of a still lack of consider.

Paula: Got it. Yeah. Yeah. Well, Ireland is in turmoil. I won’t even get into it now from a banking perspective, but, but what I am learning, uh, by listening to you, Peter, uh, and I always do enjoy that, is this focus on share of wallet for the banking sector is a massive opportunity.

Absolutely. So, yeah, and I actually always think as loyalty professionals, that’s not something we talk enough about because I think you’re right. It’s one thing to say, you know, cross sell this product, but to have visibility of whether you as Peter have, as you said, maybe five different banking relationships.

You know, who is thinking. What is, well first of all, can we get visibility on that? And I’m sure there’s data protection and all sorts of, of issues, but I’m guessing there is a way to figure it out, but at least to kind of go, we want to have the full relationship between Peter and, and everything he needs in financial services.

So it’s a much bigger way of thinking and, and certainly would make sense to me. I think what seems to be happening, as you said, is, you know, it’s so successful, certainly outside of Europe in terms of the margins and the credit cards, Absolut. , they’re just flying. So it’s almost like they don’t need to think beyond that in

Piotr: order.

I tend to Exactly. I tend to say it’s too good, you know? Yeah. So it, it, it puts you into such a comfort zone that you are not thinking about, uh, the new opportunities. And I think, uh, in, especially here in Europe, I mean the, the, the banks are, are, are trying to look for, for new initiatives because Yeah.

Yeah. The, the credit card is not the, is not the, a factor that can build a stickiness to the, to the.

Paula: Totally. And just one personal aside, and I know I always end up doing this when I’m talking with you, Peter, but I always love your perspective. I was recently, uh, coming up to the one year anniversary of my credit cards relationship here in uae, and there was a number of incentives, as there always is, of course, um, for levels of spend, particularly with, you know, Emirates, which I’ve often said, like, I, I love flying with Emirates and I, I, I love to earn skyward miles through my, my bank.

But I had no way of knowing whether I, I was about to reach that threshold, which was the incentive, which surprised me, and, and I suppose it shouldn’t because I know it’s complex, but I called the bank and I said, I know there’s a big bonus available if I spend over my threshold with Emirates within 12 months.

Right? Where am I on? Threshold. Like, am I close? If I buy one flight, do I need to buy three flights? And it was just amazing to me that there wasn’t that level of intelligence for me, my behavior, to be incentivized to say, you’ve got a week, if you spend another thousand dollars on Emirates, you get your 25,000 skywards miles.

Do you know what I mean? Like Yeah. Yeah. I felt, I felt that was a big missed opportu. Sure,

Piotr: sure. Yeah. And, and, and expanding on that, I think y you know, the, the region in which you’re, which you’re living. So in Dubai, I think this is, this proposition still, it gives you probably a lot of value, right? Yes. Uh, but it’s a, it’s a probably for, for, for local banks, it’s a good opportunity to start, start building.

additional kind of the layers of how the loyalty program can contribute. Yeah. Yeah. Um, so it can be, and basically that credit card and that you’re having with a, with a bank can be, can be a great starting point. Mm-hmm. . Uh, whereas, whereas I think in, in other, in other geographies, we should look at the other starting point.

Uh, to build the engagement factor with the, with the consumer. Yeah. And bring the credit card as an add on to it.

Paula: Sure, sure. There you go. Well, listen, thank you for answering my question about that. Um, always super interesting. I always associate you so clearly with, uh, with travel of course, and now increasingly with banking as well.

So listen, I think that’s all of the big topics I wanted to get into today. Peter. As I said, it’s been 18 months since you were on the show the last time, and I hope it’s not another 18 months. I’m sure I’ll be seeing you, uh, quite soon, quite soon. In fact. Yes, you’re having your, thank you. Your user group conference, I believe is coming up soon in,

Piotr: it’s coming up May in cracker.

So we’re inviting all of our customers around the world, uh, from, from around the world to to kra. Amazing. We are, we are kind of coming back to, to some kinda normal Yeah. Started exciting travel. We started to see each other. Yeah. Um, uh, maybe it’s a bit, it’s a bit more balanced right now. Yeah. But I think there is a, there is a lot of, a lot of happening for, for us in the industry.


Paula: sure. Yes. Well, I’m certainly hearing great things about you guys. So want to say congratulations on all of the success that Coworker is having, uh, certainly in this region. I’m seeing Great, uh, great progress and, uh, very inspiring to see. So with all of that said, uh, that’s all of the questions I have from my side.

Peter, do you have any other kind of parting words of wisdom that you wanted to share with our, with our audience?

Piotr: No, I think we touched a few, a few interesting points. I mean, we can clearly see that our, that. Industry is, is in, it’s in a different point, but it’s, we, we are becoming given more and more important to, to brands.

To businesses. Yeah. Uh, I think also the success of your podcast shows that there is a lot of interest, so also congratulations to, to contributing with a, with a great content to, to the industry. Congratulations. I’m sure it’s growing as a business as well. Yes. So it just shows how, how our, our industry. Is is greatly contributing to the, to the growth of the, of the variety of different businesses.

Paula: It sure is. Absolutely. And if people do want to reach out to you, Peter, because I know you have all of this incredible insight, if they do want to touch base with you, where’s the best place for them to find you?

Piotr: I mean, probably the best way is LinkedIn. Yeah. That’s, that’s where we are. We are all connected.

So, uh, if, if anyone wants to talk to me directly, I mean, um, on the LinkedIn and you’ll find me easy.

Paula: Sure, and of course, to make it super simple of course, we’ll make sure to link to you in the show notes. Appreciate it. No problem at all. With all of that, said, Piotr Kozlowski, Vice President of Consulting for Loyalty Solutions at Comarch, thank you so much from Let’s Talk Loyalty.

Piotr: Thank you, Paula. Thank you for having me.

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