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Loyalty and Rewards

Breaking Down Trends in Customer Loyalty

Photo: Courtesy of Blake Wisz

How can brands keep consumers engaged? We spoke with Francis Hondal, president of Loyalty & Engagement at Mastercard, for insight on the future of customer loyalty.

Francis Hondal

President of Loyalty & Engagement, Mastercard

How has the loyalty landscape evolved throughout your career, and what are the top trends today?

Most consumers today reject the idea of measuring their success by what they own. Instead, they value everyday experiences that make life more convenient, rewarding, and memorable. Our insights reflect this, with restaurant and travel spending continuing to rise. When experience is everything to consumers, creating unique experiences must be central to any loyalty program. Seamless digital delivery and personalized offers are increasingly important. It’s both the “what” and the “how” that keep consumers engaged.

How are changing consumer expectations driving the loyalty industry?

Developing the right loyalty strategy requires having a deep understanding of the consumer. Most banks, retailers, and airlines we work with are grappling with a fundamental shift in consumer expectations. Consumers are looking for much more than traditional rewards, such as points, miles, and discounts. Mastercard is addressing those needs by designing the next generation of card-linked technology, partnerships, and digital solutions that expand consumer choices. Our goal is to help brands foster that loyalty by making it easy for their consumers to interact with their loyalty programs anywhere, anytime, and through their favorite channel.

You mentioned “digital-first” offerings. How do those differ from digital solutions?

A modern business can’t survive if it doesn’t develop strategies to attract and engage consumers through digital channels. Yet many loyalty programs still rely on paper coupons and clunky web portals. At Mastercard, it’s about being digital bydesign. Brands need to focus on simplifying and removing friction for the consumer experience. For example, consumers are enjoying flexible reward redemption through Mastercard Pay with Rewards through an API to mobile banking apps or through our Mastercard app. Consumers pay for purchases with their points at millions of locations worldwide — anywhere Mastercard is accepted — with just a dip, tap, or swipe, allowing banks to satisfy consumers’ demands for instant gratification seamlessly.

What is your recommendation for brands that want to improve their personalization?

Relevance is essential. Consumers expect it, and brands are seeing the benefit of it. At Mastercard, we talk about personalization in terms of “contextual loyalty.” That means meeting the consumer where they are, on their terms — whether on their smart phone, in their city, or through their interests. The real challenge is in the execution. Brands need to make sure their loyalty programs matter to customers, forge relationships that aren’t easily broken, and provide more than rewards and offers. To succeed at this, brands need to invest in new technology platforms, data analytics, and AI.

How can businesses take a more data-driven approach to loyalty?

Understanding your consumer should be at the heart of any loyalty strategy – or any winning business. Digital connections and rich data insights are key to keeping consumers engaged throughout their journey. Beyond analyzing how consumers interact with their loyalty points, brands should seek insight on what matters most to consumers and how their brand plays a meaningful role in their lives.

As the loyalty space continues to evolve, businesses need to innovate and make smart investment choices. Our teams try to meet the challenge of continuously reimagining loyalty and consumer engagement to help our partners win the hearts, minds, and wallets of their consumers.

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