Loyalty Stories 45: Front and Center: Emotional Loyalty – Mark Johnson

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, fashion, airport brands, and so on. 

In this Loyalty Stories podcast, 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 and what’s new for loyalty programs. 

Today’s guest is Mark Johnson, the CEO and CMO of Loyalty360, the association for customer loyalty that brings together the best loyalty-focused professionals from technology and service suppliers and brands under one roof.

Loyalty360 gives members the expert insights and guidance they need to better understand loyalty and develop programs that effectively engage their customers and employees and build stronger relationships with them. So hi Mark, how are you doing today?

Mark

I’m doing well, how are you?

Gabor

Thank you very well and thank you very much for accepting our invitation for today’s podcast series. Before we dive in, would you mind to introduce yourself for our audience?

Mark

Absolutely. My name is Mark Johnson. I’m the Chief Marketing Officer at Loyalty360. We are a trade association for those who have customer loyalty programs or customer loyalty focus. We do a lot of research around customer loyalty. We run a couple of conferences, but mostly we work with brands to help them find the best solutions for their customer loyalty needs.

Gabor

Great. And as you have been working for a long time in loyalty and you must know a lot of different loyalty programs out there, and you might have done some analysis as well, what would you say, what is your favorite loyalty program and why are you naming it as your favorite?

Mark

What is my favorite loyalty program? I would probably say Qdoba. They are a competitor Chipotle. They have Tex-Mex burritos. It’s a very unique program. It’s actually a very simple program as well. It’s pretty easy to earn rewards in a short amount of time. Surprise and delight. There’s always something new that they’re doing within the app.

But I think it’s consistent with the food, which I feel is better than the other options in their competitive suite. So I think it’s a simple program, easy to use, easy to understand, but it is rewarding, which I think is very important.

Gabor

Yeah, I’m very lucky that I already had my lunch, so I’m not feeling that much hungry now. And if you look back on your career, what is the piece of work that you are the most proud of?

Mark

My career? I think what I’m most proud of is being able to build a form of brands who get together and are focused on customer loyalty. Like you, I get to speak to very smart people about very smart things. So it’s a pleasure to be able to talk to vice presidents of marketing, vice presidents of customer loyalty about what they are seeing in the industry, right? 

I enjoy that very much. I enjoy getting you know, three, four, five, 10, 20 people on a call to talk about personalization, to talk about privacy. We just released a paper on privacy yesterday, research we did, and it’s very interesting just to understand kind of where different brands are when they look at different facets of customer loyalty. 

Because loyalty is just not about the program, it’s a comprehensive approach to understanding customers. So from privacy, from acquisition, to personalization to using CDPs to aggregate disparate data sources to create not only actual insight but actual messages. It’s a very enjoyable time.

Gabor

So if you look back one, two, maybe three years in the loyalty industry, what were the biggest changes there that kind of like surprised you?

Mark

I’m not sure if surprised, I think going through COVID, there was a great deal of transformation and change that had to occur. Brands had to figure out how to stay in business, right? So they had to figure out buy online, pick up online, pick up in store, a BOPUS, and they had to figure out different ways to engage the customer. 

So they transformed a lot, moving everything from the physical locations to digital and now they’re transferring back right understanding that true human behavior is predicated on for many brands it’s in store. 

So I think it’s been interesting to watch the ship going into COVID and coming out of COVID and now obviously with some of the economic uncertainties we’re seeing in some areas of the country. I think it’s interesting just to see how brands are adapting right how they’re looking at it. Even though in the US at least the economy is still strong, it’s growing, inflation is coming down.

There’s a good deal of reticence right now to make investments in certain programs or platforms or technologies. But as we know, that can be a challenge if you’re not always being forward thinking in regard to pushing the envelope around customer loyalty. But I think it’s interesting to look how things changed going through COVID.

Gabor

Do you think that COVID kind of like moved or forced this digital transformation and it helped to develop loyalty programs that are more, I don’t know, emotional these days?

Mark

Emotional loyalty is another topic as you know that’s front and center right now for brands. I think again, we just did a paper on emotional loyalty a month and a half ago and it’s an interesting topic as well. A lot of technology providers have processes to get you through an emotional loyalty opportunity but I think true emotional loyalty gets down to having great service, having great commitment by the organization and having a great product. 

So emotional loyalty is definitely something that brands want to have. A lot of brands feel they have it, but yet they don’t know necessarily how to define it, how to measure it, and how to implement it. But there’s a famous Supreme Court justice in the United States who had a very famous quote around pornography in the Supreme Court cases. 

I don’t know how to define it, but I know it when I see it. And I think that’s the same thing about emotional loyalty. You may not know necessarily how to define it, but you know what the attributes of an emotionally loyal customer are. 

You know the benefits, you know the numbers and the opportunity that exists, but brands really struggle with defining what emotional loyalty is, how to measure it, what the KPI should be, what the metrics should be, but they know it when they see it and they know they want to get it.

Gabor

And do you think this emotional kind of loyalty programs will evolve in the future? Or are they going to trend? Or they are kind of like at the summit right now.

Mark

I think the interest in customer loyalty is going to grow. Cookies are going away starting the first quarter of 24, as you know, the last vest being the Google Hangouts. So by the third quarter, they will definitely go away. Customer loyalty programs are a way to get permission-based data on customers. 

So the importance of first-party data, second party data and then also zero party data will increase significantly as cookies go away on the internet, right? I don’t think emotional loyalty has hit its zenith. I think it has a long ways to go. Hopefully, brands who have a focus on it will continue to focus, but no, I don’t think emotional loyalty, the focus on emotional loyalty is going to go away. I think it’s increasing significantly. 

Again, what we saw in our research, what we hear from brands, they want to have customers who are emotionally loyal to them, but they struggle with how to get there. They’re struggling as I mentioned, with the definition, with measurement, with metrics, but the focus of an interest in emotional loyalty is going to increase.

Gabor

I’m very glad to hear that. And beyond emotional loyalty programs and collecting data, do you see anything that is going to be a great trend in next year or even towards end of this year? Have you had any conversations where it makes you think that?

Mark

Well, I think what we’re seeing right now, we just actually rolled out a new advisory group of about 20 different brands, vice president involved in looking at customer loyalty. I think there is a focus on metrics, there’s a focus on measurement with regard to incrementality in the program, with regard to ability to drive measurable results.

Many brands don’t do holdouts with regard to their customer loyalty program. So it makes it difficult for them to track the efficiency of the program. I think that’s a big push. So financial investment. There’s a big interest again this year in redoing the loyalty program. But there is kind of a latency right now or slowdown with regard to investment. 

So brands are you know, they may have a program they’re running with a certain technology provider, a legacy provider, that they want to get more insight from. So they’re bringing in short-term consultants to have them look at the data. Are they missing different opportunities within the data that could create a benefit for the customer and for the brand? So I think there’s a push for simplicity, there’s a push for measurements and metrics with regard to efficacy, and then there’s a big push right now to do quote unquote more with less. 

A number of programs, you saw Delta just yesterday they redefined their program again. And that creates a lot of confusion and consternation with the customers. Delta’s program is very opaque. It was to begin with, and now with a focus on spending, that creates a number of challenges as well.

Gabor

Very interesting, very interesting. And who would you consider the main stakeholders for loyalty programs?

Mark

You know, that’s an interesting discussion. When you look at brands who do it well, they usually either have supporting up through a chief marketing officer or a chief customer officer, and they have the CRM group there, they have marketing there, they have the acquisition group. It’s a consolidated approach. And I think there’s a lot of interest in that as well. 

But a lot of times loyalty may be in the product group, right? It’s a product offering, it’s productized potentially. Sometimes loyalty can be in the operation groups. And that’s one of the things that we want to do more work around in 24 is, you know, is there a best practice with regard to brands who win awards, who have effective loyalty programs? You know, what is that organizational structure? Like how many people do you have in it? Is it how many number of people do you have for a number of outstanding cards or members?

What are the rules and responsibilities? And how do you blend and balance the internal group with the external group? So traditionally, it’s usually marketing, but more and more brands are having a Chief Customer Officer, a Chief Customer Experience Officer, where the loyalty function, the customer loyalty function, the customer experience function, the marketing functions all kind of roll up.

Gabor

Great. And if we kind of circle back to the trends for the future and requirements and different stakeholders, what do you think, what are the most important elements or features of a loyalty technology solution or a platform to support the needs of today’s modern innovative loyalty programs?

Mark

Well, I think one of the most challenging things brands have is when they move a platform or they’re looking for a new platform is truly understanding what the platform does. A lot of times a platform can be sold or as having more functionality than it is. Integration is a big challenge as we know. Everyone talks about having a set of APIs that make a seamless integration opportunity, but brands are really challenged in that regard. 

We hear consistently, that they brought on a platform. It was supposed to have an integration into NCR or to Ritalics or to whomever, and it doesn’t. So then they spend months, potentially years, to get into the queue to get that integration done, and it can create a lot of challenges. The APIs didn’t work in a manner that was sold to them. So I think there’s a simplicity in having a program that can be easily integrated and easy to use.

But also there’s a big challenge with regard to technology with reporting, right? A lot of times brands have to use their own visualization tools, Domo, Tableau, whatever it may be to get the reports they need. Or they may be using those consistently within the organization as well. So I think there’s a challenge on the reporting side and also on the integration side. And those are very important when brands look at a new technology solution or replacement solution. 

But then also having quote unquote, CDP type technology that can take disparate data sources from kind of an array of sources, amalgamate them, personally identify them and action on them. I think there’s a challenge to be able to do that as well.

Gabor

Great, yeah. I am wearing kind of like a technical hat as well, so I do a lot of demonstrations of the AntaWall platform. And reporting is coming up more and more often, so I agree with the reporting capability 100% with you, Mark. And is there anything else that you have in mind that you would like to share with the audience, that we, for example, topics that we haven’t touched upon during today’s conversation?

Mark

Now, I think you’ve touched a number of them. I know in the survey there was a question about partnerships. That is another area that’s of great interest to our audience, especially with privacy concerns as they are. Brands are looking for a way to create partnerships that work for both brands or maybe two or three brands. 

A lot of times in the past, you look at travel, you look at telco, partnerships were kind of a one-way hash that only benefited the one company who was giving the reward. So if a Telco say Orange, in the UK, they had a reward option where you could get a home based gift card, right? 

So the benefit actually only goes to Orange in that regard. So it didn’t really didn’t necessarily benefit home base. So I think brands are looking to structure partnerships, especially with similar audiences that can provide value back and forth, right? They can provide second party data potentially, that brands can leverage to increase the efficacy of their customer loyalty and marketing efforts. 

So I think that’s a big area as well. And then another thing is truly having metrics that are industry wide. That’s something that we are acutely focused on right now is having metrics that can help brands understand how they benchmark against one another.

Gabor

Great, thank you Mark. And maybe just one last bonus question. When it comes to loyalty technology platform, would you suggest your clients to buy or build in-house?

Mark

Definitely right now, it would be to buy. There was a big trend, I think, going into COVID where many brands were building out their own centers of excellence, right? They were building out their own technology. They proprietary technology, like a Jersey Mike’s Jersey. Mike’s builds all their technology in house. They’re a large sub shop here in the U S., and there are other brands who moved off platforms and build it in house. 

But, like everyone else, they ran into challenges with regard to IT, with regard to prioritization of projects. So there is a complete opposite push right now to work with external providers who have the kind of development acumen and development team to help them kind of move more off of the internal platforms that they’ve been trying to build. So definitely a move to working with providers.

Gabor

Great stuff. Thank you very, very much Mark for being here today and sharing your thoughts with us. I really enjoyed the conversation. I think I enjoyed the most that for nearly all of the topics, you had a great report in mind that Loyalty 360 produced. So well done on those. But also I realized when you touched on the cookie topic that it’s kind of like a cookie apocalypse that is coming, and it’s on the way. 

So loyalty programs are a great substitute to collect first party, zero party and also second party data. And when you were talking about the simplicity and analytics capability of the platforms, I think these are all great food for thought for our audience today. So thank you very much Mark for being here with us today.

Mark

Absolutely. Thank you for taking the time to talk to me. It was great connecting with you and it was great to take the survey and look forward to seeing the results

Gabor

Thank you Mark. And for the viewers, wherever you listen to us, be it at the podcast platform, YouTube or LinkedIn, please like this podcast and subscribe to our channel to see what’s new and also get the notification for the next episode. Also tell us about your view on loyalty in the comment section below. 

Feel free to visit antavo.com to discover your next loyalty software. Antavo is a next-generation loyalty technology vendor, used by global companies like KFC, Benefit Cosmetics, global automotive, fashion brands and airports all over the world. 

Also, don’t forget to visit Loyalty360’s website at loyalty360.org or Mark’s LinkedIn page to find out more exciting details of his work. 

Thank you and see you on the next one. Bye for now!