Leaders in Customer Loyalty, Powered by Loyalty360
Leaders in Customer Loyalty, Powered by Loyalty360
Leaders in Customer Loyalty: Industry Voices Featuring Alexa Pak from Talon.One
As part of the Leaders in Customer Loyalty: Industry Voices series, we had the opportunity to speak with Alexa Pak, Customer Success Lead of EMEA at Talon.One. Pak brings extensive expertise in helping brands enhance their loyalty programs through strategic innovation and personalization.
In this discussion, she shares her insights on key trends that will shape customer loyalty in 2025 and beyond.
Good afternoon, good morning. This is Mark Johnson from Loyalty360. Hope everyone's happy, safe and well Wanted to. Welcome you back to our new Leaders in Customer Loyalty series, industry Voices. This is the second episode in our new series, which replaces the original Loyalty Live series. In this series, we spotlight innovation and customer loyalty through insights from leading consultants, agencies and technology providers in customer and channel loyalty. Our guests will share expertise on emerging trends, solutions and best practices helping brands navigate current market challenges. Today, we have the pleasure of exploring key trends and strategies shaping customer loyalty in 2025. And we will be speaking with Alexa Pak. She's a customer success lead in EMEA with TalentOne. How are you today, alexa?
Speaker 2:Thanks so much for having me, Mark. It's great to be here.
Speaker 1:In our State of Customer Loyalty report in 2024, we saw that 72% of brands believe there is a sea of sameness regarding customer loyalty programs. Can you share an example or two of how a brand successfully differentiated itself through a unique strategy, campaign or reward offering to address that sea of sameness?
Speaker 2:Yeah, of course. So businesses come to Talon One because they're looking to break away from the basic earn and burn loyalty programs that often get lost in that sea of sameness that we see with so many programs. Today's customers expect more, so in my role, I help brands transform their loyalty programs into really engaging experiences. It's what makes my job so rewarding and interesting. We help advise customers on their loyalty strategy and help them bring their strategy and vision to life. I'll give you two examples. The first is H&M. Their loyalty program transforms casual shoppers into brand advocates. So signing up for H&M's loyalty program, it's super quick. It only asks for the basics and then you're in Plus. It's a really smart way for them to gather zero party data without making it a hassle for customers. They've also tied in some really cool sustainability perks, so you can bring in your old clothes to recycle and they'll thank you with a $15 coupon, which is really a win-win, because you get to clean out your closet and then you also get to score some rewards. H&m also makes earning and redeeming points feel really effortless, whether you're shopping online or shopping in the app. You just use your digital member ID and it's all synced up for a really smooth and personalized experience.
Speaker 2:Another great example is Adidas. Their loyalty program is designed to engage and reward customers for their fitness activities, along with purchases, so, for example, points for purchases and workouts. So members can earn points for every dollar spent and for tracking their workouts via the Adidas app, and this encourages both shopping and fitness engagement, letting members gain points quickly for every workout they complete. They also have exclusive access to offers, so members can enjoy early access to sales, limited edition releases and member only products. This exclusivity always creates a buzz and a sense of belonging. Then there's the other layer of experiential rewards, so Audit Club stands out with unique non-monetary rewards like raffles for signed merchandise, access to member-only products and once-in-a-lifetime experiences like training with your favorite athletes, and things like that.
Speaker 1:Brand partnerships continue to be a significant area of interest for the members of Loyalty360 and brands that we speak with, but they can be challenging to incorporate for a number of reasons. You know what factors are critical to ensure the success of brand partnerships in customer loyalty programs and what should brands be considering before entering into these partnerships.
Speaker 2:Brand partnerships can really boost a loyalty program by giving customers more ways to earn and redeem rewards, like we talked about a bit earlier. It's great. It's a great strategy to avoid that sea of sameness by creating more value for customers. But making them work for it requires really careful planning, because you don't want to lose your customer in that process. So, for example, brands kind of need to think about three main things shared values and audience.
Speaker 2:The best partnerships happen when brands have similar values and when their customers overlap smooth operations. So everything from the tech integration to customer support, it needs to run very smoothly like clockwork. And then the last is a clear mutual benefit. So both partners need to gain something, whether that's increased visibility, new customers or better engagement, and customers also need to see what's in it for them too. One really successful example is Built Rewards. Built Rewards was founded with the goal of rewarding the billions of dollars that people spent on rent in the US. Every year, members can earn points on rent without fees and redeem their points with Built partners like Emirates, air France, british Airways and then hotels, as well as gyms like SoulCycle and Y7 Studio.
Speaker 1:Among new technologies such as AI, gamification and zero first-party data, which do you believe has the greatest impact to influence customer loyalty in 2025, and why?
Speaker 2:Honestly, I think all three will be defining trends in the loyalty space in 2025. But for me, gamification is the one that really stands out as the top engagement strategy, and that's because it taps into basic human instincts of achievement, recognition, excitement. It keeps customers coming back and it can show up in a few different ways. So a lot of times with gamification within the loyalty program, we're seeing things like points and badges, so rewarding milestones to help customers celebrate their progress.
Speaker 2:Nike Run Clubs app gives badges for completed runs and creating a motivating cycle of coming back and making sure that you are logging all of those runs. Then there's also the challenge and leaderboard aspect, so a little friendly competition can always go a long way in keeping customers engaged. Brands can introduce time-limited challenge to really increase activity and then surprise rewards. So adding an element of mystery can build excitement and curiosity, keeping customers coming back and wanting to see what that next surprise is going to be for them. But the key is to make gamification feel like a natural part of the overall experience, as competition for attention heats up. Brands that master this will really stand out in the space.
Speaker 1:Gamification has been a popular strategy for driving engagement in loyalty programs. What are some successful examples of gamification in loyalty, and how can brands use it to enhance their customer experience?
Speaker 2:Thanks, Mark, it's a great question. Gamification isn't just a trendy term. It's a proven way to keep customers engaged In the loyalty world. Sephora offers a masterclass in using gamification to drive engagement with their customers. I call it a masterclass in gamification because there are challenges for all members. The gamified challenges are available to every loyalty member, not just those in the higher tiers. There's no purchase required, so members can earn points for competing tasks that don't involve making purchases, whether that's buying online and picking up in store or subscribing to Sephora text alerts, as well as adding samples in during the online checkout. And then the other thing is members are consistently encouraged, so each completed task earns members 100 points. Encouraging consistent engagement with the program earns members 100 points. Encouraging consistent engagement with the program, In particular, in 2025, gamification strategies that will really capture customers' intention include interactive sweepstakes and points guessing challenges for rewards, as well as those limited-time participatory promotions. So helping create a sense of urgency with time-sensitive gamified offers can be a great way to grab new customers and re-engage the customers that have gone quiet.
Speaker 1:One of the big challenges that we continue to see is being able to navigate both the digital and physical channels. You know how should customer loyalty programs drive both in-store and online experiences for a seamless and cohesive customer journey?
Speaker 2:Customers don't usually think in terms of channels. They just really want a smooth experience, whether they're shopping online or in-store. So loyalty programs really need to make sure that, with every touchpoint, customers feel connected. Ways that brands can include this in their strategy are activating things like a loyalty ID, so whether the customer is shopping in-store or online or through the app, they should really only need one ID, like a phone number or an email a very easy way to be identified so that they can continue earning those points. Instant syncing purchases and point balances should be updated in real time across channels so that customers always see the most accurate info and it keeps them engaged. Cross-channel incentives, which are things like encouraging customers to interact across multiple channels by offering rewards for actions like browsing online and maybe shopping in store. Target circle rewards is a really great example of omni-channel done right. Whether customers shop in-store or online, their rewards work seamlessly across Target's platforms, making the whole experience feel effortless for the customer.
Speaker 1:As loyalty programs become more data-driven, how can brands effectively integrate and analyze customer data from multiple sources?
Speaker 2:Loyalty programs are more than just a way to reward customers. They act as a data flywheel, benefiting both the brand and the customer. The best loyalty programs don't just reward loyalty. They gather valuable insights to help brands understand their customer preferences and behaviors. To make this data flywheel work, it's important to be transparent with customers about how you collect and use their data. When you do, members feel like they're more than just participants. They become informed collaborators of the program almost, and by being clear about what data you're gathering and how it benefits them, you build trust, which keeps that data flywheel turning.
Speaker 2:From the analytics and integration side, brands need to bring together data from different sources, like purchases, interactions and even location info. So here's what that could look like Unified data using a CDP to build a complete view of each customer that you have. Smart analytics, meaning advanced models, can help spot patterns and predict what customers might do next, which allows a lot better personalization. That can be done, as well as data privacy. Customers are more willing to share data if they trust the brand, so following the GDPR and CCPA regulations is really key when done right. Integrated data lets brands offer hyper-personalized experiences, from spot-on product suggestions to well-timed rewards that customers will absolutely use.
Speaker 1:What are the most critical metrics brands should be considering when they measure success of their customer loyalty programs in 2025?, and what metrics do you believe may be underutilized or overlooked when assessing the success of customer loyalty programs?
Speaker 2:Tracking the right metrics is crucial for knowing how well the loyalty program is doing. While classics like customer retention rate and lifetime value are still really important, brands should also look at engagement rate. How often do members interact with their program? A high engagement rate usually means a lot stronger customer loyalty. Redemption rate, which shows whether customers see value in the rewards. How often are they actually using them? A low rate might mean that the reward actually isn't attractive enough for the customer, while a super high rate could hurt the brand's profitability. And then cross-channel activity. So keeping track of how many members use multiple channels can reveal how well your omni-channel strategy is working.
Speaker 2:Metrics that get overlooked. I love this question because there's two main ones churn rate for loyalty members knowing when and why members stop participating can help fix issues before people drop out as well as the reward breakage rate. So, of course, you're never going to use all of the rewards. Well, some do, but some don't. So some breakage is totally normal, but too much can definitely signal problems with how the rewards are being offered or communicated, or maybe how easy they are to redeem.
Speaker 1:Alexa, thank you very much for giving some great feedback on some of the trends and best practices that you see are going to be integral for brands to consider in 2025. Now we have our quickfire question round. We'd like to limit these to a one word or short phrase response. The first question is what is your favorite word?
Speaker 2:Incentivize.
Speaker 1:What is your least favorite word?
Speaker 2:Irregardless, because it's not a word.
Speaker 1:What excites you?
Speaker 2:The mountains.
Speaker 1:What do you find tiresome?
Speaker 2:Finding a new show to watch.
Speaker 1:Is there a book that you have read that you'd like to recommend to colleagues?
Speaker 2:Decoded by Phil Barden.
Speaker 1:What profession, other than the one you're currently in, would you like to attempt?
Speaker 2:Easy astronaut other than the one you're currently in? Would you like to attempt Easy?
Speaker 1:astronaut. What do you enjoy doing that you often don't get the time to do?
Speaker 2:Karaoke.
Speaker 1:Who inspired you to become the person that you are today?
Speaker 2:Not just one person, but a village.
Speaker 1:And what do you typically think about at the end of the day?
Speaker 2:It's always dinner.
Speaker 1:And last question how would you like to be remembered by your friends and family? Probably the best baker of cinnamon rolls. Alexa, thank you very much for taking the time to speak with us today. It was great getting to know and hearing more about some of the trends that you think will be impactful in 2025. Look forward to hearing more from you and your team, as you guys are in a very unique position in the industry as you are helping a number of brands elevate their customer loyalty approach, so it's great to hear.
Speaker 2:Thanks so much for having me.
Speaker 1:Also, I want to thank everyone else for taking the time to listen. Make sure you join us back, as Madden Vladek, the General Manager of Loyalty Services at FIS, will join the Industry Voices podcast to explore emerging trends in customer loyalty in 2025 as well. So, looking forward to that discussion, please make sure you subscribe to the podcast. Until then, have a wonderful day.