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Loyalty360 is hosting a webinar that answers that question. The webinar is titled, “LX + AI: The Four Letters That Will Super-Charge Your Loyalty Strategy in 2018,” and takes place on Tuesday, April 10, at 1:00 p.m. EDT, which will be presented by Maritz Motivation Solutions.
Barry Kirk, VP of Loyalty Strategy for Maritz Motivation Solutions, and Jesse Wolfersberger, Senior Director of Decision Sciences for Maritz Motivation Solutions, will be the webinar’s featured speakers.
Loyalty360 talked to Kirk to get a sneak peak of what’s to come in the webinar.
Why will LX and AI be four letters that will have a significant impact on loyalty strategies in 2018?
Kirk: Loyalty marketing is at an inflection point, requiring us to fundamentally rethink our approaches to customer retention and engagement. This rethink is being driven largely by significant demographic and technological shifts that have changed customers' expectation of brand interactions. We see the way forward being best described as LX, or Loyalty Experience. LX is not points. It’s not a program. It’s a holistic approach that delivers what loyalty customers now expect−an elevated and consistent experience across all touch points.
But, a new approach also requires new tools. Attempting to deliver LX using the same analytical approaches of the past won't be enough. This is where AI enters the picture. Artificial Intelligence—along with machine learning approaches—is rapidly become a requirement for effective loyalty marketing. It promises a significant leap forward in our ability to predict customer behavior and preferences and to deliver hyper-personalized offers and content.
What are some of the common factors that detract from a traditional loyalty program approach?
Kirk: The weakest aspect of most traditional loyalty programs is, ironically, the aspect that once made them very compelling—namely, their financial value proposition. Increasingly, we’re seeing that loyalty points-and-rewards constructs are showing a declining ability to drive behavior. They work, but consumers are definitely experiencing fatigue with them.
In new research conducted by Maritz, we found that 44 percent of consumers who have stopped participating in a loyalty program cited “rewards were too hard to earn” as their primary reason. We also found that 25 percent of consumers active in loyalty programs can’t even recall the last reward they redeemed for. What this suggests is that loyalty marketing needs to shift from an overwhelming focus on Mercenary Loyalty (retention driven by a financial offer) and look to develop deeper relationships through True Loyalty (retention driven by a powerful and differentiated customer experience.)
Specifically, how can AI positively impact loyalty strategies?
Kirk: AI provides the ability to process huge volumes of transactional data much more efficiently that we have ever been able to do with traditional analytics approaches. It is the answer for anyone who was asking a few years ago, “OK, I get what big data is. Now what do I do about it?” AI is able to see trends in the data that an analyst simply will not, and provide much more effective targeting of message and offers. And most importantly, as we advance in our application of AI to loyalty challenges, these algorithms will have the ability to get smarter on their own, continually refining their predictions and recommendations based on shifting data points.
What are the things companies can do after establishing a successful, engaging loyalty program to sustain its excellence over a long period of time?
Kirk: The key to retaining today’s consumer—a consumer who looks very different from those of the 80s when loyalty marketing was essentially “invented” —is to engage them with a strategic approach that combines advanced analytics and deep insights into behavioral science. AI will bring us insights that simply were not possible just a few years ago. That will change the quality of our interactions with loyal customers, making them timelier and more relevant. But, we also need to keep in our sights that consumers are human beings first. We’re rational and emotional, but mostly emotional. So, in creating an effective loyalty experience, we need to understand what makes a human experience compelling. That goes way beyond the impact on a consumer’s wallet.
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