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More than ever, brands endeavor to meet customers in real-time with loyalty program benefits and experiential rewards that set them apart from the competition. Yet many brands struggle, unable to properly leverage customer data while operating without the right technologies and integrations. Talon.One, a loyalty and promotions engine for brands, is focused on evaluating program incentives through loyalty rewards, challenges, tiers, and personalized promotions to ensure brands are executing strategies aligned with their goals. Talon.One’s platform brings together customer and session data to evaluate personalized, targeted incentives used in a loyalty or promotional context.
Talon.One works with widely recognized brands, such as adidas, Ticketmaster, Eddie Bauer, FanDuel, and retailer Harry Rosen, on their incentive strategies, with retail and fashion as the largest industries served.
Mark Johnson, CEO of Loyalty360, spoke with Sam Panzer, Director of Industry Strategy at Talon.One, about the 2024 trends in customer loyalty and some of the opportunities he sees within his organization from the brand side.
Change as a Trend
Over the last 12 months in the customer loyalty space, it’s become clear that many brands are motivated to change or enhance their customer loyalty efforts, either by adding functionality or changing loyalty program structures to improve or adjust benefits.
For Panzer, the last 10 years have witnessed such advanced technology that any brand can create a loyalty program, from corner coffee shops to the biggest brands, with the latter having been involved in building customer loyalty programs for decades. In that competitive market, many programs have launched — at times simply to follow a trend.
“Now what we’re seeing is a rationalization of benefits with brands better understanding what actual loyal behavior is and focusing more on rewarding that,” explains Panzer. “It sounds basic, but some programs were launched because the perception was that it could drive some incremental value.”
A glut of what Panzer calls “scattershot programs” gave a perpetual liability to every customer that signed up. Today, brands want to become more precise in defining what behaviors constitute loyalty — customers voluntarily sharing data and purchasing across categories.
The newsworthy changes Delta made to its SkyMiles program in 2023 are a good example of what Panzer has observed. In the past, anyone who flew with Delta with any regularity received appreciable value from the program. When changes for 2025 were announced to make sure flyers who displayed more loyal behavior were rewarded, more casual travelers were upset as some of the benefits they had received were no longer going to be part of their experience. Although Delta has pulled back on some of the planned adjustments to its program, it’s clear that the airline is seeking a way to make sure authentic loyalty — and frequency — are rewarded.
Brand Focus for 2024
Talon.One sees two key areas for brands to focus on in 2024. First, brands are encouraged to think about how their loyalty programs support the organization’s data strategy. Loyalty programs offer a great vehicle for both collecting and using zero- and first-party data. As laws and regulations surrounding privacy and data have changed the way customer data can be collected, access to certain data — such as third-party cookies — previously available will no longer be a source of customer information brands can leverage.
“By the end of next year,” Panzer begins, “Google Chrome will phase out 99% of their third-party cookies. Basically, third-party data is becoming more expensive and less usable. This affirms to brands that they need to collect and manage their own estate in terms of customer data.”
Preference centers and surveys also allow customers to share information with brands, and program members and customers can be rewarded — the data helps determine which program members are truly engaged. A perk for the brand is that it can more effectively market to the member on a “one-to-one” basis.
“I’d say the most noteworthy change in the last three to four years, and what feels like is accelerating into next year, is the data strategy in organizations and how loyalty programs are helping brands get closer to an idea of ‘data completeness,’” says Panzer.
Brands might form a long-term goal around developing an AI strategy, but to do that, the brand needs to start with good data.
The second area for brands to prioritize is being smart in investments focused on the customer. The last 18 months have witnessed a challenging economy, and brands should employ greater scrutiny and efficiency with anything that is passed back to customers through acquisition spend and retention spend.
What Gets Measured Right, Gets Managed Well
First, brands need to know how to define and measure success after changes or enhancements are applied to a loyalty program. Talon.One helps their customers with both — initial ROI program models and then when assisting in quantifying improvements to programs. Panzer admits it’s almost easier to measure improvements rather than quantifying the value in the first place.
“There’s been a shift and a move from a passive ‘earn and burn’ static program where everybody gets the same benefits toward a more personalized, targeted direction. As brands make that improvement, they’re going to have more micro-moments with customers — meaning different permutations of offers and activations to test.”
This leads to a fuller calendar of communications and touches that are going out to the customer. As that vehicle moves from the passive model to an active iterative marketing vehicle for the brand, opportunities to measure individual activations or attempts within that increase.
Talon.One works with customers to understand how to take modeling that might be seen in campaign-level attribution or marketing attribution of individual offers and move that into a loyalty context. Brands can then review all the various initiatives they’re trying and measure the impact of each of those experiments or activations.
A “Sea of Sameness” Persists
Brands report consistently that they want to stand out from their competition and differentiate in their customer loyalty strategies and customer experience offerings. And yet, the “sea of sameness” continues years later. Panzer notes this is something Talon.One has observed.
A majority of Talon.One’s customer base comes from retail and fashion. A mature space for customer loyalty — with continued growth in retail loyalty, especially — it can be challenging to differentiate solely by offering a loyalty program. In fact, those loyalty programs are not necessarily going to drive behavior in a way that they might have a couple of years ago. It’s a crowded loyalty space.
However, many brands still seek to enhance their offerings to help increase the efficacy or impact of a program.
“Brands must be able to measure the effectiveness of individual things they try in the context of the program,” Panzer says. “In terms of showing how a program is different, this could be accomplished by making sure that anything the program does accentuates the values of the brand. What is the lifestyle the brand is helping the customer achieve?”
Being true to the lifestyle built around the brand and understanding customers’ perceptions are key aspects of differentiating from other brands. The next step is to find the best way to highlight that difference and underscore it with the program.
Navigating Privacy
Privacy, from both legislative and corporate steward perspectives, is gaining ground as a chief concern for brands in the U.S. and for those who also have global customers. While many brands are navigating the challenges brought on by data and privacy regulations and newly enacted laws, additional ones are likely to surface.
Talon.One is a German company, with many of its customers and employees based in the U.S., although the company is also active in APAC. The company’s entire research and development team is still in Berlin, and Panzer says Talon.One is “baptized in data privacy,” as Germans tend to take privacy seriously. He nods to the E.U.’s General Data Protection Regulation (GDPR) and other concerns around data privacy in Europe as creating a strict environment.
“What we see in the U.S. is that most of the changes are coming from private entities,” begins Panzer. “They’re coming from very large online platforms, browsers, operating systems, and the use of third-party data and tracking. That’s been a more impactful needle that’s moved in the U.S. versus one affected by government action.”
Brands should focus on building a consensual marketing relationship where they transparently collect and use customer data in a way where customers understand what they’re sharing, why the brand is interested in the information, and how it’s going to be used.
“A loyalty program is where that opportunity shines because it’s a chance to ask customers for information in a clear way and offer a value proposition associated with that sharing,” finishes Panzer.
Avoiding Mistakes
Brands have many challenges and opportunities in customer loyalty, and sometimes, brands stumble. Brands need to be clear in their understanding of what loyalty behavior looks like for the brand and then use modeling to test the different ways customers might react to the benefits they are given.
“You should have a clear assumption of exactly how the loyalty program is going to change behavior, such as increasing basket size and frequency and improving sentiment so that customers refer more people to you,” affirms Panzer. “This clarity is vital versus simply thinking that changes made to the program will boost general customer needs. Brands must have a clear thesis of exactly how the program will drive revenue and a focused list of the outcomes the program will produce.”
Panzer sees some companies launching large programs purely as brand activation because they feel it’s something missing in their arsenal. They fail to consider what the different levers are. It’s truer for smaller brands, as enterprises can be a bit more mature in that area.
“Being as specific as possible about expected outcomes is probably the most important foundation that brands occasionally will miss,” says Panzer.
Experiential Benefits
Interest in rewards is changing. There is a movement toward more personalized rewards, and brands are focused on delivering special experiences to customers, not only discounts and freebies.
Experiential benefits can include in-person experiences and digital experiences. Simply put, they are anything else the program offers to improve a customer’s life and facilitate interactions other than the core commercial relationship with the brand.
“The main shift is toward, ‘what can we do other than offer points and discounts?’” shares Panzer. “The huge focus for us in the last two years has been on partnership-driven programs. What are the complementary other products and services that can be introduced to customers? That’s been a thing in telecommunication and credit card loyalty for a long time, and I see it entering into new sectors — certainly in retail.”
Panzer cites point transfers as a value within partnerships and extra opportunities to earn points on something as simple as paying rent — which is a component of Bilt Rewards. The benefits offered in the Bilt Rewards program are all partner-driven. Members can even use Bilt Rewards points to book SoulCycle spin classes — which speak to their ideal customer. Again, it’s displaying a commitment to the lifestyle around the brand. Mastercard might help Millennials and Gen Z unlock a “cool urban lifestyle.” Panzer also nods to less flashy programs, like a landscape company’s program that partners with a business to help customers prepare taxes — not necessarily a fun experience, but certainly experiential.
When considering partnerships to create experiential benefits for program members, brands need to take a win-win approach. Some partnerships might even be commercially neutral. While there might not be an emotional connection for customers, the rewards or benefits the partnership offers can still be meaningful to the member and increase the likelihood of staying with the brand instead of switching to a competitor.
“The playbook varies from business to business, and you might realize there’s not a way to make the partnership work commercially,” says Panzer. “But I would say that it’s at least worth exploring.”
Panzer admits it can be difficult to manage customer validation technically with a third party. A focus for Talon.One is how it can manage the sequence of API calls to handle that validation.
Taking an Iterative Approach in Customer Loyalty
Many of the brands coming to Talon.One have static loyalty programs consisting of “earn and burn” points and tiers. They’re not iterative; they do not evolve. Instead, the programs are stuck in a perpetual liability with customers.
Talon.One endeavors to move brands to embrace that iterative approach in loyalty — especially with being in real-time.
“A big focus is how do we [Talon.One] make sure that everything about the program is being evaluated in real-time before, during, and after purchase so that even in the order confirmation email, brands can start to communicate with the customer,” explains Panzer. “Brands have the opportunity to say, ‘Hey, here’s the progress you’re making toward your next reward milestone or the next tier.’ It’s powerful psychological information you can show users, letting them know that they only have ‘this far to go’ or this much to add to the basket to hit the next year. There’s so much in-the-moment marketing that program operators leave on the table simply because there’s an overnight sync with their loyalty program legacy technology before they can show anything in the program to the customer.”
Remaining involved throughout the customer experience in real-time is the most important part. Value must be shown throughout the shopping experience, on the checkout page, in the order confirmation emails, etc., so that customers clearly know what they are working toward and what they need to do next.
Look for Real-time Challenges
There is a move to more “real-time interactions,” especially within some industries. However, it’s a challenge for brands to meet customers “in the moment” due to a variety of factors, including having the right data, technology, and integrations in place. Panzer acknowledges this and advises a comprehensive audit to understand where lags and overnight syncs are located and what weekly manual BI jobs are stitching everything together.
“For the more commercial managers or marketing managers of a program, they might not understand where the issue is located. It’s always worth reinvestigating exactly where those delays are,” says Panzer. “There might be something in the CRM, the CDP, or the point-of-sale system where there’s a delay, or if your store is offline 20% of the time because the internet at the shopping mall your store is located is poor. You need to understand where the connectivity is breaking down in the stack and make sure that you know exactly where the blockers to real-time are.”
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Download the Loyalty Strategies for 2024 report here for more insights, plus examples for each strategy from the brands getting it right.
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