0:00 - on current tech trends in loyalty • 2:20 - on foreword from Thomas O'Toole and contribution from Michael Smith and Lincoln Hunter • 4:00 - Thomas O'Toole (Kellogg) commentary • 6:35 - Michael Smith (LSA) commentary • 9:35 - on who this book is for • 11:30 - one key takeaway from the book • 12:34 - how I would spend 1'000'000 points • 13:35 - one loyalty feature I would invent • 16:02 - advice to anyone starting in loyalty.
Loyalty & Reward Co.
0:00 – on current tech trends in loyalty
2:20 – on foreword from Thomas O’Toole and contribution from Michael Smith and Lincoln Hunter
4:00 – Thomas O’Toole (Kellogg) commentary
6:35 – Michael Smith (LSA) commentary
9:35 – on who this book is for
11:30 – one key takeaway from the book
12:34 – how I would spend 1’000’000 points
13:35 – one loyalty feature I would invent
16:02 – advice to anyone starting in loyalty.
Read full transcript.
Episode 2
00:00
GLO: In the last three years, loyalty and customer experience made gigantic leaps in technological advances – we’re seeing the majority of the programs looking into personalization, gamification and even possible incorporation of AI (artificial intelligence), Big Data analyses, Web3. How’s your second edition addressing this technological challenge, and what are the main conclusions you came out with?
Philip Shelper, Loyalty & Reward Co.: One of the chapters we did a significant rewrite of for the second edition was the technology chapter. There is so much going on in the technology space in loyalty programs. The fact that loyalty is such a lucrative industry and permeates so many different aspects of B2C and B2B businesses means that there’s an incredible amount of investment and innovation happening in the technology space, lots of problems to solve, and lots of opportunities to unlock.
We did a big rewrite and included a lot of additional case studies within it. There’s an enormous amount happening in AI, so we’ve expanded the AI section quite a lot. There’s an enormous amount happening in the convergence of payments and loyalty, as well as some really exciting niche innovations that have come to the fore in that space.
With respect to Web 3 and blockchain, I’d previously written a book called “Blockchain Loyalty” – the first and second editions. We made the decision this year to retire those books. They were very out of date. If everything moves fast in loyalty, it moves way faster in blockchain so rather than write the 3rd edition, we actually condensed it down into a new chapter on Web 3 and Blockchain, which is Chapter 12 of the book. There’s some amazing stuff happening in that space. I think it’s got a very long way to run and I think people have taken their eye off the ball over the last 12 months with NFTs, and DOW, and cryptocurrencies, and everything that’s going on. But there are some really, really exciting projects bubbling along beneath the surface, and we’re going to see a big resurgence of Web 3 in 2024, there’s no doubt.
2:20:
GLO: Your 2nd edition has a foreword by Thomas O’Toole, who heads the loyalty academics at Kellogg School of Management in the USA, and also contributions for chapters on security and legal aspects of loyalty from Michael Smith and Lincoln Hunter. How did these contributions impact the book, and why did you select these experts?
Philip Shelper, Loyalty & Reward Co.: One of my associates decided to do the MBA at the Kellogg School of Management at Northwestern University last year and when he signed up for the loyalty module, which is run by Professor Thomas O’Toole. He received a list of recommended readings, and he was excited to see that it included the 1st edition of ‘Loyalty Programs: A Complete Guide’, so he has let me know. It totally made my day, and when he started the course, Professor O’Toole mentioned to everyone in the class that they should buy and read the book. I then reached out to Professor O’Toole, and we established a bit of a relationship. He’s a very clever and experienced man – McKinsey used him to run loyalty program design projects for them based in Chicago. When it came time to complete the 2nd edition, I thought to reach out and ask him if he’d be interested in writing the foreword for it, and he very kindly agreed to do that. So, to have him associated with the book makes me very proud.
4:00
Thomas O’Toole, Kellogg Business School: Hello, my name is Tom O’Toole and I am the Associate Dean of Executive Programs here at the Kellogg Business School of Northwestern University. Also, I am a clinical professor of marketing here at Kellogg, as I mentioned in the forward to the second edition of loyalty programs.
Over the course of my time here preparing, developing and teaching a course on loyalty programs on loyalty strategy, including but not limited to loyalty programs, I found that while there is a myriad of books and articles and podcasts and more out there on the subject of loyalty that there was a real lack of a book in particular that I could use for my course and that I could recommend to others that struck a balance between practical experience and academic rigour. It wasn’t until I came across Phillip’s book that I found a book that I could read and recommend and react both that this is written by people who’ve actually done this in the real world for real companies and yet, at the same time, have an intellectual framework behind it, some rigour to their thinking. I found Philip and his colleague’s book and do think it is the best out there on the subject of loyalty programs and all of the related and growing extensions and manifestations of loyalty practices.
5:55:
Philip Shelper, Loyalty & Reward Co.: Michael Smith, who helped construct the ‘Security and Fraud’ chapter and Lincoln Hunter, who helped construct the legal chapter. One thing that I do know is I don’t know everything about loyalty. There’s an enormous amount that I still have to learn every day, and certainly everything related to security and fraud. There’s no one in the world who knows more about that than Michael Smith and his team, so when it came time to construct that chapter, I reached out to him, and he was very kind to donate his time to help us construct one of the best chapters in the book.
06:35
Michael Smith, Co-Founder, Loyalty Security Alliance: In my experience, this is something every loyalty practitioner should read and think about whether they have sufficient protections for their own loyalty program. The book, I think, is just an excellent contribution to the whole world of loyalty programs. First of all, because it’s not anecdotal, it’s not stories – it’s based on hard facts and the research that sits behind loyalty programs. I really think it does deserve the title of the ‘Complete Guide’ to loyalty programs. To the best of my knowledge, I think it’s the only book that actually has a section on loyalty security and fraud. I don’t believe that anyone else has published anything as in-depth in terms of loyalty programs and how they can be defrauded. Over the years, as the Loyalty Security Alliance (LSA), we’ve done a number of surveys, and one of the surprising things was we found that 1 in 10 of the people running loyalty programs actually didn’t know that their programs could be defrauded. That’s an absolutely shocking statistic, and hopefully, they will get a lot from reading the second edition of the book.
I think one of the bits that the book covers is two main areas. The first is all the traditional areas of fraud, where people are double dipping, where they’re getting benefits that they shouldn’t and, and a whole range of other things have been around probably since loyalty programs began.
The second bit that it goes into a bit more depth about is a takeover, and this has been a huge trend that has been growing over the years as loyalty programs become more and more digital and online. The fraudsters have realized that it is possible to get into these accounts and clear out the value. There are various figures about how much value has been stolen from these programs, and some of those stats are actually in the book, where we’ve been able to get them publicly. But that is the real growing trend – people getting into other people’s accounts, turning points into flat-screen TVs, digital downloads and other things before the programs or even the member has noticed that these amounts have gone from their account. The book goes into way more depth than I can go on to here; it gives practical solutions on how to stop the fraudsters, bearing in mind that some of those fraudsters may be what appear to be your best customers too, e,g little thing called “first party fraud”. The book covers all of those with lots of practical examples of some of the things that have happened over the last couple of years, especially during the pandemic. The second edition definitely provides more case studies and details.
9:55:
GLO: Do you think that the audience of the second edition is much wider than your audience of the first edition, and if the people already bought and read the first edition of your book? What do you think they need to look out for in the second edition? Is there any special advice?
Philip Shelper, Loyalty & Reward Co.: I don’t think the audience has changed too much. Our target audience for the book is anyone who’s in marketing. We believe that loyalty programs are the most important marketing discipline of the 21st century. It helps build marketing databases, collect data, and influence the design of life cycle marketing strategies; it’s a critical element in building out channel personalization approaches. It’s also a really great way to manage data governance processes as well. So we’re trying to get anyone who is working in marketing to really go deep and understand the importance of loyalty programs for their business.
In terms of readers who have the first edition and may be wondering whether they should get the second edition – of course, you should get it. It’s got 25% more content in it, lots of fresh case studies, and it’s very, very, very up-to-date. I think one of the most recent academic research projects that we put in there was from June 2023, so you can’t get more current than that. It’s an absolute steal. Why are you even sitting here watching this video – just jump on Amazon and buy it already.
11.30:
GLO: That’s brilliant, Philip; thank you a lot. If you had one conclusion, a takeaway, from your second edition on loyalty, what would it be?
Philip Shelper, Loyalty & Reward Co.: Probably the takeaway for me is that loyalty programs have been around since the 1850s, and they never stay still. There’s constant innovation, change, expansion, and experimentation, all in the effort to try and drive deeper consumer engagement through recognition and reward. When we go out and look at everything that’s happening across the world, we’re constantly amazed by the amount of innovation that is taking place. I find it very inspiring. We try to capture as much of that as we can in the book and knowing that no matter how much we see and how much we write down on paper, there’s way more out there that we aren’t exposed to, so we feel that we’re on a constant quest to continue exploring in this space and finding out everything that we can about the amazing experimentation that’s taking place.
12:34:
GLO: It became a tradition at GLO to know a little bit more about the key players and key leaders in the loyalty industry and CX, and at the end of each interview – we ask three personal questions which can help our members, the young members, who are just starting in the loyalty industry to learn. So, I have three questions for you in sprint format. Number 1 – If you had a million points, where would you spend them? Yeah, if I had a million miles of points?
Philip Shelper, Loyalty & Reward Co.: I’d invested in the new Audi electric surfboard, so I’m a big snowboard fan. I love snowboarding. I also ride an electric skateboard to work and to the office every day. Audi has brought out this amazing aerofoil surfboat that surfs above the water. They’re very expensive to receive, but I really, really, really want one, so I’d probably blow all of the points on that.
13:35:
GLO: That’s the most interesting answer we had, I think, in a couple of weeks! If you had no limit on the budget and on the timeline and you had all the abilities in the world to invent one feature for the loyalty program, what would it be?
Philip Shelper, Loyalty & Reward Co.: My favourite author of all time is Ian M Banks. He was a very famous and very accomplished science fiction writer, and unfortunately, he passed away quite recently. In several of his books, he talks about the idea of a neuronet, which is a small piece of technology injected into people’s brains that covers all of their synapses and neurons and effectively records their memories. So when they die, the memories can be uploaded into a database and reinserted into a new body so they can achieve a sense of immortality. So, if I had the opportunity to invent anything for loyalty, it would be a neuronet that also enables the recording of everyone’s loyalty cards so you could walk into any store, and the store would automatically recognize you and award your points.
14:35:
GLO: If you could give one piece of advice to the young Phillip just starting in the Loyalty marketing and customer experience industry, what would it be?
Philip Shelper, Loyalty & Reward Co.: The advice I’d give to young Phillip would be to join lots of loyalty programs. Where we live in an amazing industry where we can go and experiment as much as we like and see what’s out there and have a play with it whenever I go into a store, and I’m asked if I want to join the loyalty program, I always say yes, and I always learn something so if I’m joining a new loyalty program. I’ll transact with the company, I’ll earn some value, I’ll redeem that value, I’ll read the terms and conditions, I’ll have a play with the website and with the app, and with the in store experience and always learn something so having joined hundreds of loyalty programs has really helped me get a basic handle on what makes for a good loyalty program I think if I was a baker I’d be recommending that I eat lots of cakes if I was a car salesman I’d be recommending that I drive lots of cars. But one of the things that I never understand with a lot of loyalty practitioners is that many of them don’t actually join lots of loaly programs or or play with laly programs themselves I find it very odd so so I would definitely provide that advice to young Philip.
16:02
GLO: Thank you so much for your insights. It’s really important for Global Loyalty organization members to hear advice from such a pillar in loyalty industry as your and I’m sure you already started to work on your third edition which we really looking forward to probably Buy in 2025 or 2026.
Philip Shelper, Loyalty & Reward Co.: Thanks Anastasia really great talking to you and I’ve got to say out of this interview I’m absolutely delighted to hear that you know of loyalty practitioners around the world who actually have a copy of my book on their desk it makes me very happy and feel like all the energy that we put into creating the book has been worthwhile.
Source: GLO
