The goal is not just to drive another purchase with a discount, which is described as a "drug." Instead, brands should foster an emotional attachment through superior product, experience, and personalization, making customers genuinely happy to engage with the brand.
While AI is a foundational requirement, the true evolution is viewing loyalty not as a standalone program but as an "always on" enterprise infrastructure. This system cuts across all brand functions, is accountable to the bottom line, and prescriptively guides next-best actions.
Loyalty isn't just about rewarding existing customers. A key, sophisticated metric is its ability to convert "category heavy splitters"—customers who shop across multiple brands in a category—by offering a superior, personalized experience that shifts their spending.
The erosion of third-party cookies and rising privacy laws have forced a fundamental shift. Loyalty programs are no longer just a marketing tactic; they are now the central, consent-based engine for gathering and activating the first-party data essential for the entire customer experience.
CFOs are often skeptical, viewing loyalty as a cost center for customers who would buy anyway. To overcome this, brands must move beyond vanity metrics and use attribution models that directly tie every loyalty campaign and strategy to incremental revenue on the P&L statement.
Drawing a parallel to Mike Tyson's famous quote, brands must recognize that even the best plans are fragile. Competitors or shifting consumer expectations can deliver a daily "punch." This necessitates a culture of high-speed adaptability; if you're not feeling pain from moving fast, you're not moving fast enough.