Loyalty Summit CXM: A time of great change

The loyalty industry is abuzz, there’s no denying that; and part of that buzz was recently cranked up by the much-anticipated Loyalty Summit CXM in Zurich. Commencing on March 15th, the two-day event hosted loyalty professionals from all over the world, who flew into the Swiss capital to talk loyalty like never before. 

Being huge believers in the power of loyalty and creators in the space, Open Loyalty, represented by Cezary Olejarczyk and Hubert Świątkowski, also took part in the event. Having returned with a mineful of insights and ideas, we’re here to share them with the rest of the loyalty community and pass on some the insights and ideas we brought home with us.

Customer Experience (CX) meets loyalty

Given how much value we place on delivering the best possible customer experiences, it’s surprising the extent to which the loyalty industry struggles to utilize CX practices to its advantage. Offering an outsider’s perspective, Michael Killeen, the CX Academy Founder, commented on this unfortunate disconnect between loyalty and CX, and convincingly illustrated the benefits of the former embracing the latter to build lasting bonds with customers. 

While Michael reiterated the importance of the “emotional” over the transactional, he posited a view that isn’t always so obvious. His assertion was that building CX in loyalty starts with engaging the whole organization, particularly those employees who come into contact with your customers, and represent one of your touchpoints. While this may seem like an easy fix, in practice, it can be a real challenge, especially for large organizations with hundreds - if not thousands - employees on their payroll. Making sure they are all equally well-versed in and passionate about the company loyalty program can be a Herculean effort. 

Nevertheless, Michael insists that happy staff = happy customers, and this is where the focus should lie. 

Behavioral science of loyalty

Behavioral science is a concept often discussed in business circles, and buzzwords such as “nudging” get thrown around a lot. Influencing customer behavior is integral to the success of any loyalty program, and loyalty marketers employ a number of different tactics daily in order to do so. Nevertheless, those tactics are based on data at best and bold assumptions at worst. 

In his keynote presentation, Rory Sutherland, Vice Chairman of Ogilvy UK, argued that loyalty needed to embrace a more scientific approach to driving the desired customer behaviors. Behavioral science and its principles offer a more methodical approach route to customer loyalty, one which Rory likens to “corrective eye surgery for marketing”. That means analyzing our data from a more emotional perspective; understanding the “why” and the “what” with the help of behavioral science. 

A key element of this MO is testing.Testing things that are less about hasty rational assumptions based on what our data is telling us, and more about the things that we all have in common and that make up our innate psychology, e.g. fairness, autonomy, status, relatedness, and certainty. 

Sustainability and customer loyalty

Sustainability is yet another aspect of loyalty that was explored during the conference. In a panel discussion led by Phil Rubin, Zsuzsa Kecsmar, Stephanie Haeger, and Renaud Derville, the role of corporate sustainability was extensively discussed with regards to brand trust and customer loyalty. 

Today’s customers have come to expect more than a purely transactional relationship with the companies they buy from - a notion that has been shown in a report carried out by Charlie Hills of Mando-Connect in her white papers, including “Understanding Loyalty in Europe”, which Charlie presented at the summit. The research findings show a strong affinity for environmentally-conscious behaviors in many countries across Europe, with programs like Costa Club spearheading the trend.

Loyalty professionals definitely aren’t looking the other way, as countless brands are devising sustainability-focused schemes. Examples include allowing customers to use their points towards supporting charities, or - in the case of fashion brands - giving consumers the opportunity to have their clothes fixed instead of purchasing new ones (with Patagonia being an early adopter).

Brands have come to understand the importance of building trust through “doing their bit”, and how good customer experiences are no longer based on purely economical factors (although it’ll be interesting to see how this plays out given the cost-of-living crisis and widespread inflation).

Emotional connection: the common denominator

The common thread running through many, if not most, of the presentations, speeches, and panels boils down to the human touch. Whether that’s through increased focus on social responsibility and rewarding non-transactional behaviors; adopting CX practices and tapping into the “emotional”; or leveraging behavioral science and viewing our data through a more human lens. 

The importance of embracing non-transactional loyalty tactics was also reiterated during a discussion about AdiClub, a loyalty program set on accelerating engagement by tapping into customers’ need for non-transactional rewards. 

In the meantime, the discussion also touched on another important question: how do you get your Chief Financial Officer (CFO) to buy into employing these tactics? For better or worse, your CFO is the most important person when it comes to implementing novel initiatives, and unless you can make a strong business case and assured them of future profitability, you’re out of luck. That’s why it’s important for company values to reverberate throughout the entire organization, which is precisely how AdiClub overcame this common barrier. 

These are just some examples of how building emotional connection with customers has become the blueprint for customer retention and fostering enduring loyalty. It’s therefore fair to say that we’re probably going to see more and more brands treading this path in the future. However, given the widespread inflation (cited frequently by loyalty experts in our Loyalty Trends Report 2023), it will be fascinating to see how companies reconcile the two, and deliver the value their customers seek.

NFTs

Ever since NFTs, non-fungible tokens, have been pushed to the surface during the COVID-19 pandemic and caught the attention of the mainstream online community, they have become a huge topic of discussion across many industries. With digital artists such as Beeple making $69 million sales and huge amounts of money changing hands on account of this novel piece of technology, NFTs went from a crypto fad to a potential treasure trove. 

It’s no wonder then that NFTs became a discussion point at Loyalty Summit CXM. A panel led by Iain Pringle (moderator), Gabriele Giancola, Thom Kozik, and Noelle Reno tackled this burning trend. Here are some of the key takeaways:

• The loyalty world is actively looking for ways to adopt the novel technology and capitalize on the popularity of NFTs and blockchain. 
• Despite good intentions, NFTs remain poorly understood and the concept is shrouded in blockchain jargon, making it difficult for brands and consultants to apply in the context of loyalty. To make matters worse, there is a scarcity of information and education with regards to how NFTs actually work, or could work. 
• Unsurprisingly, big brands such Starbucks and Adidas are smoothing the path and using certain elements such as tokenization to enrich their offerings. 
• Adidas is carefully watching the trend, viewing it as an excellent enabler of borderless loyalty programs, as well as a way to optimize payments and reduce transaction costs.
• Nevertheless, brands aren’t jumping into NFTs head first; the technology remains a trend to be observed carefully, however.

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To say that Loyalty Summit CXM was an incredible conference would be an understatement. While the speeches, presentations, panels, and networking were all extremely thought-provoking, giving us much to mull over in the context of our own work, the event itself really cemented the loyalty industry as its own community in a unique way. A big kudos to the organizers and speakers!

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