The Loyalty Summit CXM in Stockholm offered a fascinating look into the future of the loyalty program industry, particularly the evolving role of technology and artificial intelligence (AI) in shaping successful loyalty strategies. This recap distills some of the most compelling takeaways from the summit, insights into the responsible adoption of AI, reminders of the enduring importance of loyalty fundamentals and how brands need to strike the right balance between innovation and trust. Whether you're an early adopter or still cautiously exploring AI, the conversations in Stockholm gave us ideas on how we should face it.
Related link: Explore our recap from Loyalty Summit CXM in Los Angeles
Exercise caution in your adoption of AI in customer loyalty programs
During the keynote session with Stephen Scott, Chief Product, Technology and Data Officer at IAG Loyalty (custodians of the Avios loyalty currency, with 69 million collectors worldwide), we were offered a glimpse into the scale of their digital journey. Their platform now handles billions of API requests per month and sees six software releases every day. Their 2020 vision was clear: build a robust, reliable technology platform that supports partners, empowers teams and enables the business to scale and evolve.
That vision strongly aligns with our mission at ITA Group, helping people and brands thrive together. But as AI becomes more embedded in customer loyalty strategies, questions remain. Can AI empower your teams, serve your customers better and help your business scale? The potential for productivity gains is significant, but so are the risks.
Proceed with intention when combining customer experience and AI
According to Gartner, 73% of CX leaders believe that adopting AI at scale is the only way to survive the competitive pressures of the next five years. But 64% of consumers say they'd rather not interact with brands that use it. Even more striking, 53% say they'd consider switching to a brand that doesn't employ AI. There's a trust gap to be addressed.
Consider the case of Apple suspending its AI generated news alerts after repeated summary errors. What's the long-term cost to brand trust? In moments like that, deploying AI too close to the front line of customer interaction can backfire if it fails to meet expectations, potentially eroding one of the most important emotional connections a brand can have.
Trust isn't just a value; it's a business driver. CMB, an ITA Group company, recently released a study identifying six pillars of trust and their varying importance across nine industry sectors. The findings clearly show trust plays a powerful role in brand consideration and satisfaction.
There's no substitute for getting the basics right in a loyalty program
In his keynote presentation “What AI will not tell you about loyalty,” Iain Pringle of New World Loyalty, a global team of experts who provide independent advice on all aspects of loyalty and partnership marketing, asserted an important truth. AI isn't a magic solution. It may enhance your program, but it won't create a successful one on its own.
Iain emphasized that loyalty programs shouldn't be launched simply to learn more about your customers. You need to understand your audiences, behaviors, preferences and needs before you begin designing your program. Only then can your loyalty strategy meet the challenges and opportunities within your customer base. We couldn't agree more. At ITA group, every program begins with EPIC Design (empathy, purpose, impact and context). We use this framework to deeply understand the brand, the participants, the purpose and the desired outcomes, enabling us to deliver consistent, measurable and sustainable results.
Iain also shared a practical checklist of considerations beyond AI when designing a loyalty program.
- Know your customers and set clear program goals.
- Develop a compelling value proposition for program members.
- Be purposeful in structuring the program.
- Ensure ease of participation.
- Build a clear communication strategy.
- Collect, analyze and act on data.
- Monitor performance with feedback loops.
- Personalize engagement and ensure relevance.
- Stay compliant with legal and regulatory frameworks.
Of that list, Iain highlighted the two most important priorities, value and ease. If you don’t get that balance right, your program will likely struggle. Get those priorities right and you'll unlock real impact.
Related link: Increase loyalty program value with improved functional benefits
Value and ease matter in successful loyalty programs
We've seen the same in our own research. After analyzing data from 5,000 participants across 50 programs in nine industries, we found that loyalty program members who feel the value of participation outweighs the effort of participation are more likely to become brand advocates. Our research showed they're in fact six times more likely to visit, six times more likely to spend more and six times more likely to bring in more wallet share. If your program isn't quite delivering on expectations, we recommend reviewing the fundamentals. Innovation has its place, but it shouldn't be used to conceal more serious foundational issues. Before investing in the next wave of technology, make sure your loyalty program delivers real value and ease, simply and consistently.
Want to see how your industry’s loyalty programs compare to others? See our in-depth customer loyalty report here and explore more of what customers really want.