Loyalty Stories 43: How AI Enables Better Data-Based Delivery – Nik Laming

Gabor

Hi and welcome to Loyalty Stories, that is Antavo’s podcast on customer loyalty and loyalty programs. I am Gabor Vigh, one of the Partnership Managers at Antavo, and Antavo is a technology vendor that empowers loyalty programs all over the world. We help various great businesses such as KFC, Benefit Cosmetics, and very well known global automotive brands, fashion brands, airports and so on.

This is the Loyalty Stories podcast, where we dive into the trends around loyalty programs and customer loyalty. We talk with industry experts around the world to pick their brains to learn what’s next for loyalty programs. Today’s guest is a returning contributor to our report, Nik Laming from Urban Leopard Ventures. 

He is an independent loyalty consultant, a strategic advisor specializing in designing, revamping, transforming, supporting and managing loyalty programs for allies, retailers and many other industries. So hi Nik, how are you?

Nik

Hi Gabor, thanks for the introduction. Yeah, it’s all well and good here in Manila in Asia.

Gabor

Oh, that’s nice. I’m jealous about the weather. And before we dive into the questions, can you please briefly introduce yourself to the audience?

Nik

Yeah, sure. My name’s Nik Laming and I’ve been in the loyalty industry for more than 20 years now as a as a consultant, but also I’ve started businesses. I’ve created loyalty programs and run and manage them and work for loyalty management company companies for many years too. So, yeah, a long term participant in the loyalty industry and quite excited by the prospect of this report on the industry.

Gabor

Great, thank you Nik. And just to warm up, this is kind of like a question that we ask from everyone who is volunteered to be on this podcast. And this is kind of like expected from our viewers. What is your favourite clarity program and why?

Nik

My favorite loyalty program, and this is purely from a professional perspective, because I was fortunate enough to have a hand in the design, and I’m an advisor to this program still, and it encapsulates next gen loyalty programs, an ecosystem. 

And it’s also airline-centered, which is one of my passion projects and it’s the data program from Viva Aerobus in Mexico so a long way from home for me but they’ve done a fantastic job with that program and as I say it really does deliver on everything that you could expect from a modern next generation ecosystem loyalty program

Gabor

Great, and is this the piece of work that you are most proud of?

Nik

The I’ve actually got two here. I think the. Piece of work I’m most proud of is the program that I was able to design from a blank sheet of paper and take it through to eventually being spun off into a loyalty data and digital business. So it would be the get go program for Cebu Pacific and the now the Gokongwei Group, which includes retail, bank. 

And at the time we had about 250 partners in the program. It was self-sufficient and it was, yeah, the best piece of work and probably the best job that I could ever have hoped for was designing, building, and managing this program and growing it into the business that it is today.

Gabor

Oh great, thank you for sharing this with us, Nik. And as you are a very well experienced loyalty consultant, what do you think, what are the big changes in the loyalty industry in the recent years?

Nik

Yeah, I’ve got five areas here that I just I’ll talk through very quickly. The first is that the pandemic has driven a step change to digital in the, especially in some of the markets I operate like Mexico, Philippines, Thailand and so on. We’ve seen a rise in loyalty on the app and also a convergence with things like payments in that there are QR code payments in markets like the Philippines and there’s been a convergence with those QR payments and the use of the mobile app. 

We’ve also seen another type of convergence in the, again with an app, where in the UK especially you’ve seen these discounts, every discounts being combined with a loyalty program so you access the discount as a benefit of the loyalty program and you’re getting member-only pricing so I think that’s quite an exciting development and certainly a big change that we’ve seen in the market.

The second is that technology is enabling everything to be better. All of the things that we used to only dream about 10, 15 years ago, are now within our grasp. And AI has had a big part to play in that. And it’s enabling us to deliver on not just finding data insights, but also turning those into action that’s for the benefit of loyalty programs and the operators. The third would be there’s a renewed focus on loyalty as an essential part of the mix. 

I think a lot of that has been driven by the realization of value, that there is real value in these programs and they’re very measurable and they make an impact on revenue and on the growth potential and profitability of the companies that run them. Plus they can become an asset worth billions of dollars if they’re created and managed in the right way. The fourth is that consumers have changed.

So they’re now seeking out value from the loyalty programs, which is probably driven initiatives like the discounts being included under the loyalty umbrella. We’re seeing revenge travel, but we’re also seeing programs struggling with status. So especially airlines where travel was wiped out for a year, two years, and is only really getting back to where it used to be now. 

So status programs that used to run efficiently and well and there was something to aspire to where you’re a gold member or you’re a silver member and you get certain benefits, well they’ve been really impacted by the pandemic, and by people’s behaviour post pandemic. So we’ve been talking for a while about this status cliff where people are falling out of the tiers and what’s gonna be done with them, which has proved a big challenge to programs.

When you couple that with expiring points and miles, because people haven’t been able to use them, they haven’t been able to maybe have the activity that they used to have. So points are, and a lot of them, and miles, are gonna be expiring in the near future. So operators have been forced to make changes to their Loyalty program and come up with new strategies and initiatives in order to reduce the impact of these changes in the market and respond to consumers and the way that they have changed since the pandemic. 

And the final one, and this is one of again probably my passion projects, is sustainability has become a factor in loyalty programs, whether that’s through rewards or initiatives in support of companies, CSR policies and activity. We’ve seen airlines like Etihad doing a really good job there I think in adapting their loyalty program to cater for the desire that people now have to be more sustainable and to interact with brands and loyalty programs that support that. 

I think less so in Asia, but it’s a change that I feel is coming and it is sweeping the world, but a little slower than perhaps the pandemic did. So that’d be the five major changes that I think I’ve seen over the past few years.

Gabor

Great, thank you, I am really happy to hear about, especially the last one, these kind of ESG initiatives that can be now supported by loyalty programs as well. What do you think, what will be the two main fresh trends in loyalty programs in the upcoming years? Will any of those that you mentioned evolve somehow further something new coming.

Nik

There will always be something new, but I can’t really predict what that is. So I’m gonna go with two that I think are relatively fresh. The first is that there’s been this idea that loyalty programs are valuable, they’re very valuable, and they maybe shouldn’t be a cost center, they can be a profit center. 

And so I think that’s one trend that’s set to continue and organizations are certainly focusing on how they can transform their traditional loyalty program into a more next gen model where they’re able to generate profit from it rather than it just be a cost. And the second would be, I think AI is a genuine change in the landscape. I’ve not had this level of belief in another technology change. I think since cloud-based infrastructure came in, that really gave us a huge change in what we could do with loyalty programs.

I’ve skipped over blockchain because I think it’s a great solution, technical solution to a, maybe a problem that doesn’t really exist, but it’s a better way of doing things. But, I truly believe that AI is going to be one of those developments that revolutionize what we can do with loyalty programs and whether it’s generative AI enabling us to, to give natural language to our systems, and then it gets coded in the background. 

Or whether it’s other, I hesitate to say, but more traditional forms of AI, where we’ve got better fraud management, fraud detection. We’ve got to improve targeted marketing and we’re genuinely delivering on the promise that analytics made to us some years ago in that we understand so much about you but unfortunately we can only deal with nine segments so therefore we can’t really personalize or tailor to the level that we’d like to.

So they’re the two trends I think that will continue the commercialization and drive to profit centers and the more use of AI to simplify and take us to whole new levels in what we can deliver with the loyalty program.

Gabor

Great, and according to your point of view, how a loyalty program technology company could support this or should support this? What are the main features that a technology should have? Is it the integrations, gamification, no code or omni-channel capabilities or AI capabilities, of course, what you said?

Nik

I think unfortunately for the loyalty tech providers, it’s going to be an and rather than or it really is going to need to be an and. So I mentioned that the there’s a drive towards financial performance or independence of these loyalty programs. That means increasing revenue streams. 

So building out things like a targeted marketing capability similar to retail media networks that we’ve seen where you’re able to deliver targeted advertising to partners and charge them for that, where you’re able to deliver sophisticated analysis and campaigns on autopilot driven by AI. So AI gets integrated additional features to enable more revenue streams.

A reduction of the reliance on IT teams to deliver enhancements, new features and functionality. So no code for feature deployment, configuration and configurability and extendability being essential, supporting ecosystems. 

So I think more and more, there’s an expansion of partner networks, which means doing different things for different organizations who and need to be integrated so that there is going to be a need for tight and rapid integration with a whole host of tech components that the clients may well have in their tech stack. 

So it’s going to be very busy for the loyalty tech providers. And we’ve seen a lot of activity in the market where companies are evolving fast, that they are launching AI projects, but I’d encourage them not to forget the basics and not to forget the fact that these programs need to be supporting organisations’ strategic goals and business goals if they’re going to succeed.

Gabor

Thanks for sharing your thoughts with us, Snake. Is there anything else you have in mind that you would like to share or advise to our audience?

Nik

I’m going to take a minute here and have a think. I gave him a pause so he could cut the question off.

Gabor

Sure, sure.

Nik

So anything that I would advise or what was the question again?

Gabor

Or you just want to share related loyalty that would be, I don’t know, like important to keep in mind, for example, when companies are looking into deploying one or buying a technology or when they are looking into like revamping loyalty programs.

Nik

Got it, okay. Three, two, one. I truly believe that we’re in a great place for loyalty programs right now. There’s a lot of energy, there’s a lot of enthusiasm, there’s a lot of activity in the market and those need to be supported by the right technology but also the right resources and the right support from management and the right level of focus on operations, data privacy. 

So it’s not gonna come without its challenges, but I really do believe that we’re in an exciting place at the moment and the only way is up. And there is going to be a need for companies to move fast, maybe faster than they’ve ever moved before. And that’s going to require them embracing new things like AI, but also not getting distracted by things like AI to the point where they don’t move forward with their own strategy and they don’t execute in a bulletproof and rapid fashion.

Because it’s all very well playing with these new toys. But if you haven’t resourced correctly, you haven’t put the right plan in place, you haven’t executed, then it’s gonna be destined to fail and they’re very, very expensive mistakes. 

So I’m actually quite excited from my own perspective about this because with all of these developments comes the need for good advice and good consulting practice so that these initiatives can succeed in delivering their core business while getting the best possible advice and coaching on how to revamp, redesign and reinvent their loyalty programs. So yeah, an exciting place to be.

Gabor

Yes, indeed, indeed. And maybe just one last question before we wrap up. In last year’s Loyalty Report, we kind of like touched based on stakeholders who are coordinating the projects. And this year, yeah, I personally would like to follow this trend with you, Nik. What do you think when you’re working on a project?

Who is the main stakeholder of a loyalty implementation? Is it in the hands of marketing, IT, or someone else? Or is it like a cooperation or co-production within different departments in the company? 

Nik

In my fantasy loyalty world, the main stakeholder would be the CEO of the loyalty organization, the loyalty entity that’s been created to deliver loyalty and the various, either C-level or director level people that are responsible for each of the moving parts of the loyalty program that sit underneath that person. 

Because that is the cleanest model and it’s the way that things happen the fastest and with the best outcomes, but all too often loyalty programs are distributed throughout an organization, often several layers down an organization may be reporting up through marketing into commercial, into the CEO. And it becomes not only detached from the corporate strategy and doesn’t have a seat at the table of senior management where the decisions are being made. 

But it can also become distributed throughout the organization. So you have to speak to the to the head of marketing for campaigns. You have to speak to the head of commercial for promotions and maybe the value of the points. Then you’ve got the CFO of the main organization that’s saying, well, this is a gigantic cost. 

Why are we doing any of this? I need justification. And then you’ve got a CEO who’s saying, yeah, this lousy stuff’s kind of interesting. Give me something good for the annual report, but I don’t wanna hear about it other than that. So it’s really challenging dealing with all these different stakeholders. 

And I hope that becomes more streamlined as we see more programs held to account and becoming more profit centers or businesses in their own right as opposed to being either a division, a department or worse a concept that’s distributed between all kinds of different departments within an organization.

Gabor

Great, thank you very much Nik. And yes, thank you so much for sharing your thoughts, sharing your point of view about loyalty in the past and in the for the future as well. It was a pleasure talking about loyalty with you today, Nik. My favorite part was definitely when we talked about the technology and their capability that it can enable now, basically everything and not just only to deliver data findings, but also it can turn it into actions. 

It can provide a lot of different data, valuable data to add to the loyalty or the customer 360 of, not just a loyalty member, but also a customer for the company. And also that loyalty can be a profit center. I think nowadays, a lot of people think of like loyalty is just a cost center. It’s a huge investment, but definitely it can be turned into a profit center and simply companies can transform their existing loyalty programs at these new kind of innovative, creative, modern features for their existing loyalty program to make it a success story.

So thank you very much for sharing all of these, Nik. And for the viewers, wherever you listen to us, like maybe on a podcast platform, YouTube or LinkedIn, please like this podcast and subscribe to our channel. So this way you can get notified about our next episode. And please also tell us about your view on loyalty in the comment sections. We are very keen to learn your view on loyalty. Visit antavo.com to discover your next loyalty software. 

Antavo is a next-generation loyalty program technology company used by global companies like KFC, Benefit Cosmetics, global automotive and fashion companies, and airports all over the world. Also visit the website or the LinkedIn page of Nik Laming to find out more exciting details of his work. 

Thank you very much for your attention. See you on the next one. Bye for now!