Mark Johnson, CEO of Loyalty360, spoke with Laura Miller, SVP of Strategic Services, and Martha Cohen, Vice President, Client Services at Kobie, about leveraging artificial intelligence (AI) to reduce pain points, breaking down organizational silos to build better programs, and challenges in customer loyalty.
Mark Johnson, CEO of Loyalty360, spoke with Laura Miller, SVP of Strategic Services, and Martha Cohen, Vice President, Client Services at Kobie, about leveraging artificial intelligence (AI) to reduce pain points, breaking down organizational silos to build better programs, and challenges in customer loyalty.
Good afternoon, Good morning. It's Mark Johnson from Loyalty 360. Hope everyone's happy, safe and well. Want to welcome you to another edition of Loyalty Live. In this series, we have the privilege of speaking with the leading agencies, technology partners and consultants in customer channel and brand loyalty about the technology trends and best practices that impact the brand's ability to drive unique experiences, enhance engagement but, most importantly, impact customer loyalty. Today's focus is going to be on the trends that will likely shape the customer loyalty industry in 2024 and beyond. We have the pleasure of speaking with Laura Miller she's the Senior Vice President of Strategic Services and Martha Cohen, who is the Vice President of Client Services at Kobe Marketing, about the challenges and opportunities in the year ahead. Welcome, Laura and Martha. Thank you for joining.
Speaker 2:Thank you for having us.
Speaker 1:Absolutely. First off, we'd like to start these on a more personal level, so it would be great to know a little bit more about yourself, your current roles, kobe, and in your background, and we start with Martha.
Speaker 2:Awesome. Well, thanks so much, mark. We're really excited to be here. Like you said, I'm Vice President of Client Services at Kobe and specifically, I oversee our travel and hospitality portfolio, and with Kobe for coming up on four years and prior to loyalty, I've spent time all over the marketing landscape, from brand marketing to digital social media, etc.
Speaker 1:Okay, and Laura.
Speaker 3:Hi, so I am new to Kobe. I've been here for just a couple of months and I am over our Strategic Services group and really just working with our clients around our technology to offer, if it's consulting or strategic solutions to really round that out holistically and really drive to those like client focused results that I know that everybody's looking to do.
Speaker 1:Okay, for those who may not be familiar, can you give us a brief overview of Kobe, kind of what you guys do, how you do it, the brands that you work with?
Speaker 2:Yes, so at Kobe, our company mission is growing enterprise value through loyalty. So you know we do a lot from a programmatic loyalty perspective, but we also believe in the power of loyalty data and the traction it creates to influence things on a larger brand loyalty scale. So we have end to end loyalty solutions across services, like Laura talked about in her area, as well as technology and other products. We have been in the business for over 30 years, we are privately held and debt free and profitable. Those are things we like to call out because they focus on our ability to make agile decisions in the marketplace for our consumers and not be beholden to boards and what have you. And we have a continued investment in the innovation that our clients are looking to see. We serve a number of different verticals. I particularly serve travel and hospitality, but we also have clients across FI, subscriptions, retail and so on.
Speaker 1:Okay, there's a great deal of focus right now on measuring the accuracy of customer loyalty programs the CFO is more involved in every report or making sure that there's, you know, good attribution, there's good return on investment. When you look at some of the programs you are on, you guys want a cadre of great programs and you do a lot of great work for them. Many of them are members of loyalty 360 and they all send your praises. What do you believe that are the three or four top metrics brand should focus on?
Speaker 3:Yeah, I think the question is really fun because it's almost as if it's not three or four metrics, but it's almost like the interplay between metrics.
Speaker 3:It's like I think historically there's always what's our acquisition number and what's our engagement number and what's our cost per point, and now we're seeing a little bit more of like how those connect together to measure, like the overall customer experience. So if it's getting more into NPS or CSAT or even just like some of the emotional around the connectivity, if it comes from social or sentiment or even surveys like how are we looking at that? So we always look at like we always say like we have our triple play data with emotional, behavioral and transactional. It's really the interplay between it which I think we're getting more and more questions on and even elevating the conversation a little bit of how's our loyalty members compared to non-members, if it's how they're using an app or how they're just engaging in the brand on social. It's those comparisons that I think is getting. It's elevating the conversation across the C-suite and looking at a little bit differently than just like the silo of a loyalty program.
Speaker 1:Okay when you look at some of the metrics that your clients are asking for you. New technology out there, new reward opportunities are they going? To be asking for different types of metrics that they should be focusing on now. That may have not been the same in earlier, in 23 or even a year, so bad.
Speaker 3:Yeah, I think there's a few. I don't know if it's the different types, but it's how they evolve over time and making sure you really understand the reasons why they're evolving over time, I think, is what's really important, instead of just a point in time. So it's before. It's like you have your dashboard and it's great at showing you what that metric is, that month that fits like cost per point, which obviously is so important. Everybody will be important because that's how you're driving your financials, but how that's looking over time and how you're evolving it based on your strategy of your program.
Speaker 3:So if you do have a strong acquisition push for a period of time and I've seen this before where people are like we're just about getting a big number of members and sometimes they do things that are good and bad and we all we and we've all seen that but then that plays out over time in terms of maybe you've put a lot of liability on your books that it's not going to come off because people aren't engaging in your program. So then what's your engagement strategies for that population of people to do it? So, again, it's again that like it's the metrics across the journey and not just single points and times. I think that's where clients are pushing us more and more and I think that's great to have like the tools and the reporting in the dashboards to show that, but also there's like the person that can look at it and tell you like, hey, you did this and it's causing another problem, maybe down the line or another opportunity, down the line of something that you can do differently.
Speaker 1:Okay, this year we've heard a lot good deal, should I say regarding AI, generative AI discussion that we have in kind of the monthly meetings or weekly meetings we have with brands. So this emerging technology is very interesting, but brands are really leveraging it right now as much as they probably would like to. What opportunities do you see for AI and the benefits for brands on their customer ability strategies?
Speaker 3:Yeah, I mean AI is definitely a really hot topic and I think most brands and you know, for us we use a lot of ML, so a lot of machine learning in terms of our models, to really drive to that personalized offer, or really taking in tons of data and analyzing it to be able to predict something like churn, which is really important for our clients. But when we get into like the generative AI side of it, I think there's some really fun use cases that clients can start leaning into to help people across the journey. So we travel in some of the use cases there where it's like if I'm a rental car company, I know when somebody lands at an airport like oh, here, I know, you know, I'm like looking around, like what are the signs telling me? How do I get to the rental company? Do I need to take a shuttle? Is it here on property? And being able to know that this is where the person has gone, and be able to proactively help them in that journey, to go like, hey, you need to take a shuttle, this is the place you need to go to it, versus trying to read all the confusing signs.
Speaker 3:I think that that's a great use of like almost like a chat bot that's on steroids.
Speaker 3:So I think of like chat GPT that we probably all use, sometimes for fun and sometimes for work, to see what it does.
Speaker 3:But it's like you're asking the question to the AQ answers really quickly. I think there's a lot of use cases in that. Again, even for flying, you know you think about some of the when you get off the plane there's different things that people want to do. Usually it's like where's the nearest bathroom? And you see in some airports that there's a sign there as soon as you get off and it's like has the air to where to get there quickly. But if that could be served up through your app as you're landing, because you know that's like usually a pain point in the customer journey that you're helping people along, I think there's a lot of ways that AI can can help in that journey. So I think that's where we're going to see a lot of use cases to be more proactive along the way, especially just keep learning on what pain points are and what people are looking for as they're going about, especially for travel. I think there's a lot of use in it quickly.
Speaker 1:Excellent.
Speaker 3:Do you have a?
Speaker 1:definition for AI. That's something that the brands are struggling with too what AI is and what it means. Is it just a neural network? Is it just an algorithm that's been refined around a large language model, or do you think that's something that's evolving and the industry should be focused on?
Speaker 3:I think it's evolving.
Speaker 3:I think the thing that we talk a lot about is, when we comes to AI, it's still going to be human guided.
Speaker 3:It's not just going to run and go. There's a guy in our team that likes to tell a funny story a little bit about I can make a model that can tell you that shark attacks and ice cream sales are correlated. It's like, okay, he goes. Yeah, I could prove that to you, I have the data that can prove that to you. I'm like, okay, I get the joke of the fact that, yes, anybody could do that, but it's really because the weather's warmer, more people are swimming and then, of course, the weather's warmer and more people are eating ice cream. It's like they're not actually. But that's where the human side of it really comes in to understand the data points and what people are trying to show, where it could be very misleading if you're not really thinking about it. I think we really like to think about it, as there's humans still going to be in it, and making sure that it makes sense for each of our clients and the business that they have.
Speaker 1:Interesting. Well, it's going to function into that correlation. I was watching Freakonomics the movie. I bought it over the weekend. I've read the book a number of times, listed a number of times, but there is in the book. They talk about when Polio was running rampant in the 40s and the 30s. Right that they originally attributed to ice cream sales because Polio spiked significantly during the summer and they ran models and it just it had a similar pattern. So there was a huge scare at the time that people wouldn't like ice cream because they thought that that was contributing to Polio. Yeah, you got to make sure models I guess that's the message for that.
Speaker 1:So, Martha, when you look at some of the mistakes brands are making when it comes to their customer loyalty efforts, what do you think some of those are and how should they be addressing them?
Speaker 2:Yeah, I think that in the client services role, our focus is a lot of the time breaking down the silos to talk about how to think about the program from an insular perspective, but then also how it applies outside of the program. So one of the biggest things I think that we see is the best marketing as consumer focused and that means that it's integrated right. So not understanding the two-way dynamics of how loyalty serves the business or how the business can have an input into loyalty is a big mistake. That, whether it's change management or creating governance structures, it's something that we try to overcome to get our partners to look to their counterparts across the marketing organization and make bigger and better decisions.
Speaker 2:I think another thing that goes hand in hand with that is thinking that you can work within that bubble alone to overcome some parts of the business that you can't just overcome with loyalty. So if there's a bad product design or a bad experience in a store, for example, no amount of great loyalty construct is going to overcome that. So taking the learnings that we hear from the program and sharing that out across the org so that we can make broader improvements is key. And then, finally, I think that it goes back to simplification right. So the more that we know more about customers and the differences in what they want, we have this desire to make our programs more complicated. But it comes back to being simple and making sure that we leverage the technology to create the simplicity right. So if I'm serving something to you, mark or Laura, I might have the same bag of tricks but I serve it up really differently and I let the technology power that so that our customers get what they want out of the program.
Speaker 1:Okay, martha, one of the things that we're seeing is that the interest in rewards is changing as a movement, as you know, towards more personalized rewards, whether it's content or offers or incentives. Brands are also looking at special experiences, surprise and delight, so not just freebies and discounts and things based on kind of frequency. What do you see from your clients and what are their customers, their members, asking of you and of the program when it comes to personalized rewards?
Speaker 2:Yeah, I think this landscape has been changing for quite some time, and whether we're looking at all of the portfolios that Coby serves or, more specifically, travel and hospitality, covid was such a huge disruptor. So, as I think about travel in particular, the who and the why of who is traveling has changed significantly. We have a lot of younger travelers and you know correlation. We've got two things here that have gone hand in hand. We've got a lot of younger people coming into programs and we have people who care less about cashback.
Speaker 2:Cashback has kind of been the bane of existence for a lot of programs for a lot of time. It's expensive, it's transactional. So we're seeing people who want those experiences and they want them tailored to them. So we're doing a lot to build an optionality within our programs so that we allow our customers to define what matters most to them. It's important that we take the data that they give us so that you know they're not self-serving across a wide variety of options that they can't really navigate and serving them up to them in a meaningful way. And then a bigger part of that is from the experiential component. Another particular business might be really focused on one specific consumer offer, but a partner ecosystem is key to be able to tap into something that's maybe adjacent to your vertical that adds value and maybe a lower cost item as compared to, like we said, the cashback route.
Speaker 1:Okay, are there some specific experiential rewards that brands are using that you think are effective?
Speaker 2:Well, we've certainly seen some of our clients who are really tapping into some cultural zeitgeist. You know it's been a big year for Taylor Swift and Beyonce, you know, and there's a little bit of a coattail there where we can create experiences for customers that are cheaper and at scale. So, whether it's a partnership to see a free viewing of one of their concerts or a super drop it super ticket drop excuse me that we do for one of our clients, you know we actually only invest very little money in a couple of experiences, but it gets a broad net of excitement around it. So, again, that's really going back to that partner network to make sure that we're giving people ways to experience in our brand that attaches emotional feeling to it so that they remember, hey, this brand enabled me to feel this way about this moment, this thing that I experienced with my kids, my friends, etc.
Speaker 1:Okay, when you look at analytics and strategy should I say analytics and creative? You know they're. At one time the CMO was either strong on more the creative side and now you had this convergence of analytics and strategy and the creative, you know, changing the role of the CMO quite dramatically. When you look at that, you know how should brands be focused on that, especially for when design and administration of customer loyalty programs.
Speaker 3:Yeah, I think there needs to be a really strong collaboration across all those teams and it really comes down to how do we best use data. So I mean data should be like informing marketing in terms of truly understanding who the customer base they have are, but also like understanding who they, what they're looking for and that ideal customer. So it comes down to that data and then collaborating across those teams to a lot of it is getting to like really knowing what your KPIs are and goals and I think if you get those groups to do it together, there's really good alignment. And for us it makes makes our job even easier when we have that alignment across the C suite to say, like marketing is in line with the CFO, that's in line with on even the CEO and the technology teams to enable that.
Speaker 3:But I do. I really believe that it comes down to having like that good data to be able to drive to the outcomes that support all three of them. And a big piece of that for us is like really looking at like learning agendas and coming up with good test and learn plans that can drive that. So it doesn't have to be these wholesale big changes that we can look at different elements of a program and test it and see how it's changing.
Speaker 2:So if it's adding in new redemption options or a different way to earn, or to some of the examples that talked about with experiential seeing how the customer base reacts to that and evolving it over time, that supports the business case across the entire C suite and I think Laura, just to build on that for you, mark, I think one thing that's really interesting Laura and I have both worked with creatives for a very long time and there's this tension right where, if you're thinking more from a mass media perspective, you're trying to get your message down to the lowest common denominator and as we started to collect more and more data, it made things more complicated of we still have these large channels that were pumping information out, and now we have so much data, how do we decipher which is the most important?
Speaker 2:So we keep going back to the technology. The technology and the data is actually what is setting creative free right now. Because we have the ability to make creative so meaningful, because we know who we're sending it to, we know the context of how they're receiving that creative, we know the outcome that they're trying to achieve in the business objective. So we've seen a really interesting shift in our creatives around that excitement with data. That's really cool.
Speaker 1:So you talk about that. Looking at data, obviously there's some pretty essential roles that data have in marketing, with personal installation, but content and more offer perspective. But brands are so much challenged with regard to how much data they should be used. Right, and there's a cohort of of agencies not Coley, of course, but they come in and they want everyone to boil the ocean. Right, you need a hundred different data points. You need 40 years of data, you know to make sure the models are fine, right? Because then it makes it very difficult to measure and if you can't measure, you can't manage it and manage it. And then you have millions of dollars, tens of millions of dollars in the program so they're not working right, and that causes kind of what we're seeing right now, where programs aren't performing at an optimal level. So when you look at that, how should brand manage the amount of data they need to start gaining some, you know, efficacy in the programs.
Speaker 2:I think, laura, I'll start and let you build. I think that the idea is that we want to prioritize the data points that we're asking for. So all data points aren't created equal. They're not going to get us the information that we can use to your point mark or action on given. You know what our marketing efforts are, so we want to make sure we're crystal clear on that. And then there's also a consumer expectation. So if you ask me for my birthday, I'm probably going to expect to have a birthday reward or something of the like, even a message that you tell me. So we want to make sure that when we are asking consumers to share that data point, they understand why and they're seeing a benefit to it.
Speaker 1:Okay, excellent.
Speaker 3:So I think I would add onto that too is like we like to think about things as like, almost like building a progressive profile on somebody. It doesn't have to be everything day one. Let's learn over time, let's gather information over time and then evolve our messaging and our story. So it definitely does not need to be 4,000 data points on somebody day one. It is about learning how and what they're responding to and how they're interacting with the brand and then changing up how we interact with them back.
Speaker 1:Okay, that's a whole hard layer. I think iteration is very important because iteration gives a baseline to measure from where the brands can really look at efficacy and look at return and look at incrementality.
Speaker 3:Right. That's why I think testing is so important and having those learning agendas that everybody agrees to across the different organizations, so that way you know what the outcome you're trying to drive towards are and have that alignment I think is so important.
Speaker 1:Absolutely so. When you look at some of the biggest challenges you see with customer loyalty offerings today Laura, strategy, technology, organizational buy-in, a lot of metrics or some of the ones that we see what do you see as kind of maybe one or two of the challenges that you're seeing most within your clients or in sales or engagement opportunities?
Speaker 3:Yeah, I think you touched on a little bit of it, but it's proving that enterprise value of the program and I mean it's a little bit of like we talk about in terms of like even our mission. But how do you really measure that? How does everybody have alignment to it and making sure that everybody believes in it? And sometimes you have the teams that's managing the loyalty program thinks that they're crushing it and it's doing great, and then another team within the same organization doesn't feel the same way. So how do you make sure you have that alignment across the teams?
Speaker 3:I think is important in continuing to show the metrics of how the loyalty members are performing against non-members and kind of that value chain of what's important to get people from a retention standpoint and a repurchase standpoint.
Speaker 3:I think that's really important. It's easy to say but it's harder to measure and make that everybody is agreement on it. And then another one we see is we elevate the conversation of a loyalty program to be a little bit more tied to CRM and the customer experience is making sure that the data is connected. And Martha just said the example of like okay, you collect my birthday, I'm expecting something from it, but it's also if I'm interacting with somebody on the call center perspective and then it seems like a marketing communications coming out and it's not connected to an experience I just had, like that's not what people are expecting and so it's connecting the data across the organization so that there is cohesive customer experience. I think it's always going to be a challenge, especially for clients that have been around for a long time and have a lot of legacy data and technology that needs to be cleaned up.
Speaker 1:Okay, excellent. Well, thank you very much for those great responses. Great to hear what you guys are seeing. But now it's time for the ever fun lightning round of quick fire questions. So we're gonna split this up. We're gonna have Martha. Sorry, Martha, go first, go Martha. And we like to keep these to a one word sentence or a short phrase, or I get in trouble with my content team, so I don't want that. So we're gonna go with Martha first, and then we'll go through them and then we'll switch over to Laura. So, Martha, what is your favorite word?
Speaker 2:On the monopea.
Speaker 1:Yeah, I know a lot of words that might lift that up. Great, what is your least favorite word?
Speaker 2:Very every, always just hyperbole's in general.
Speaker 1:What excites you?
Speaker 2:Problem solving.
Speaker 1:There you go.
Speaker 2:What do you find?
Speaker 1:tiresome.
Speaker 2:Swirl.
Speaker 1:What brand does customer loyalty well?
Speaker 2:I've the second time I've said this today Spotify, I love Spotify, okay.
Speaker 1:What profession are the one you're currently in? Would you like to attempt?
Speaker 2:Oh gosh, woodworking. I'm a brother of woodworker, I think it's really cool.
Speaker 1:What book do you like to recommend to colleagues?
Speaker 2:I like to do some that are a little off the beaten path. So the coaching habit, it's something to the fact of ask more questions and say less and change the way that you manage people.
Speaker 1:Okay, who inspired you to become the person you are today?
Speaker 2:Cop out. I'm not going to say a person, I'm just going to say failure, just failure and not dying and learning from it.
Speaker 1:That's good. What do you typically think about at the end of the day?
Speaker 2:I think about if I showed up the way that I wanted to. So, whether that's with my family or my friends, or work, and tomorrow's a new day.
Speaker 1:Excellent. And the last question how do you want to be remembered by your friends and family?
Speaker 2:I want to be remembered for being caring and that I always tried.
Speaker 1:Okay, great when I switch it over to Laura. Laura, what is your favorite word?
Speaker 3:Joy.
Speaker 1:Excellent. What's your least favorite word?
Speaker 3:Fine. I hate that from the kids in my life and they tell me they're fine. I'm like. What does it even mean? I know.
Speaker 1:I always ask for clarity on that word as well. I'm like what does that mean? What excites you?
Speaker 3:Collaboration.
Speaker 1:Okay, what do you find, harrison?
Speaker 3:Back to back meetings all day, especially when they're 30 minute meetings all day. Just exhausting.
Speaker 1:Oh, exhausting. What brand does loyalty well?
Speaker 3:Am I allowed to say minions, because of your backdrop? Yeah, minions are good, that's perfect.
Speaker 1:What profession are you currently in? Would you like to attempt?
Speaker 3:I want to be a professional surfer Hands down.
Speaker 1:Okay, have you surfed before?
Speaker 3:Yeah, and I surf in Michigan. There's even that fun to it. Am I good at surfing? No, but I would really like to be a professional surfer.
Speaker 1:Okay, what book do you like to recommend colleagues?
Speaker 3:Atomic Habits. I just recently read that and I thought it was really good.
Speaker 1:That's a good book. A map grant, right, mm-hmm. Yeah, his new book is amazing as well. Who inspired you to become the person you are today?
Speaker 3:I think not anyone person. I think it's really more. A lot of times I get inspired by people that I know I don't want to be like Some people and how they interact, and it's like I learned more from people that I was like nope, I don't want to be that way. That gives me more inspiration for the person that I want to show up as.
Speaker 1:Okay, perfect. What do you typically think about at the end of the day?
Speaker 3:I have a gratitude journal that I write in every night. That's three things I'm thankful for that day, so try to end the day with positivity.
Speaker 1:Okay, and how do you want to be remembered by friends and family?
Speaker 3:Probably going back to my first word, that I brought a little joy to their life. That's what I would love people to think about.
Speaker 1:Well, thank you very much. So, laura and Martha, great discussion, love the quick fire responses, but I appreciate everything you do Custom loyalty, you guys do a lot of great work and it was great to hear about some things you're seeing for the trends of 24. So thank you for your contribution.
Speaker 3:Thank you, Mark. Absolutely Happy holidays.
Speaker 1:Happy holidays to you and happy holidays to everyone who's listening. It's actually being posted after the holidays, but hopefully everyone had a wonderful holiday season and looking forward to seeing everyone in 2024. Until then, have a wonderful day.