Customerland
Customerland is a podcast about …. Customers. How to get more of them. How to keep them. What makes them tick. We talk to the experts, the technologies and occasionally, actual people – you know, customers – to find out what they’re all about.So if you’re a CX pro, a loyalty marketer, a brand owner, an agency planner … if you’re a CRM & personalization geek, if you’re a customer service / CSAT / NPS nerd – you finally have a home.
Customerland
Breaking Loyalty - Part 2: What Customers Want and What Companies Need
In Breaking Loyalty Part 2, Mike Ribero and Mike Giambattista explore the shift from traditional loyalty programs to building authentic emotional connections that go beyond points and rewards.
Mike dives into how loyalty strategies have evolved, emphasizing the importance of seeing customers as more than mere transactions. He offers insights into how businesses can adapt to focus on long-term commitment, staying relevant even when purchases slow down. Learn how to leverage ecosystem-based models that expand the reach of loyalty programs and create real value for your brand in today’s crowded marketplace.
We also address the often-overlooked issue of unredeemed points and the financial strain they can cause, exploring how direct engagement platforms can redefine brand-customer interactions. As the industry stands on the edge of significant change, Mike shares the importance of thought leadership in driving this transformation. Join us for a conversation grounded in experience and strategy, offering practical approaches to enhance your loyalty programs and foster genuine, lasting connections.
Given that today's customer is far more informed, far more empowered and incredibly diverse. Brands today face a unique challenge in their marketing to generational segments that are more diverse than ever, each of which has their own particular and very unique needs and wants. But across the board, what customers want today is a relationship that's more reciprocal with the brands that they buy.
Mike Giambattista:Welcome to Breaking Loyalty, part Two. I'm honored and excited again to be talking with Mike Ribeiro because, as we were just talking before we hit the record button, one of the things that is crystal clear to me in my role here at the customer is how much I'm going to try and say this diplomatically junk there is that comes across our desks that is painted as thought leadership, but which actually is anything but. And yet, when Mike Ribeiro and I start talking about loyalty, one of the things that I find most valuable about these conversations is that there's not a platitude in sight. We're talking about things that are actual pain points, actual problems, talking about actual solutions and creative approaches to them, and that's the reason why Mike and I have developed this three-part series called Breaking Loyalty. Today's focus will be on what customers want and what sponsoring companies need. So, rather than listen to me blather on, let me just thank Mike for joining me and we can start this conversation.
Mike Ribero:Thanks, mike. And again, continuing on part one, which really kind of defined the current situation for loyalty and how we got here, let's really go back and dig into the research and really try to understand what it is customers want after participating in loyalty for decades, given the realities of today's marketplace and where things stand. So I think what makes sense is let's talk about the customer first and what they want from brands and, more specifically, from a loyalty program, and then we can get into what brands need to deliver against customer wants and needs in a way that's economically and strategically viable. Let's call it.
Mike Giambattista:I like the way you set up this conversation earlier, which was, you know, there's one set of desires on one side of this equation, there's another one over here. You've got the consumer wants and needs and you've got brand wants and needs over here. So what we're really setting up is kind of a two-part Venn diagram, looking for that intersection where there's a viable solution or solutions to these kinds of problems. But let's start with, as you suggested, let's start with what consumers are really, really looking for.
Mike Ribero:So if you look at the research and there's a lot of I've taken research from Capgemini, from Ebo, from Bond Accenture and those will be referenced here but kind of at a fundamental basis, in today's market, given that today's customer is far more informed, far more empowered and incredibly diverse, brands today face a unique challenge in their marketing to generational segments that are more diverse than ever, each of which has their own particular and very unique needs and wants. But across the board, what customers want today is a relationship that's more reciprocal with the brands that they buy, relationship that's more reciprocal with the brands that they buy. In the old world it was more of a subordinated relationship, a one-size-fits-all, and here's the platform take it or leave it. There were some real issues with that. There wasn't a lot of flexibility. There still isn't. There wasn't a lot of reciprocation going on.
Mike Ribero:The brand expectation was you be loyal to me, but I don't necessarily have to be loyal to you and you really shouldn't expect a whole lot in return. And that's been paid off by the way. Over time, as technology has been deployed in place of human contact, kind of the empathy that was once there has kind of evaporated, and so the relationship is kind of the foundation of any loyal relationship, and unless that relationship evolves to being more of a partnership, more reciprocal in nature, where a brand and a customer's interest can be aligned against the growth of that brand, where both benefit, we're not going to get anywhere.
Mike Giambattista:Completely agree. That all came home to me recently One of the colleagues that we have in common. We both know this person but was talking about how a customer decides who to be loyal to. This is a conversation, so it's fully anecdotal, but apparently this person was asked that question how do you decide who you're going to be loyal to as a consumer? And her answer, I think, was really telling. The answer was it's the companies that love me the most, and we don't really talk about that. Me the most, and we don't really talk about that. That reciprocity in values and emotions seems to be a far secondary, tertiary consideration when people are considering these kinds of things. But on the human side of that little Venn diagram we were talking about, emotions play big.
Mike Ribero:Yeah, and let's go back to that, because one of the things that got the industry into the problems it's having today is that the tangible side kind of completely took center stage over the emotional side of loyalty.
Mike Ribero:So it was always about a balance of reward and recognition reward representing the rational side, the currency the tangible benefits, and recognition always being the emotional side. It's the appreciation, the hey, we value you as a customer, we appreciate what you do for the brand and the company, and that's gone by the wayside. And the bottom line is you look at any piece of research out there that's focused on the importance of emotion. There can be no loyalty without an emotional bond with the brand. And that goes back to the basic neurology of human decision making, which is based on kind of the priorities given to what's called the limbic system, which is the emotional, sensing, feeling part of the brain, and then it's substantiated and buttressed with the rational side of the brain. But that point, mike, can't be stressed enough. And again, yes, you can buy business by giving more rewards and things, but that can be undermined by a competitor like that.
Mike Giambattista:Sure sure, I mean, if you really want to boil it down to the ultimate human terminology, you know when that woman responded to that question saying it's the, it's the company or brand in that case that loves me the most. You know, love is, is a. That's a really subjective kind of evaluation, but I love how clear she made it. You know it, it was not about discounts, it was not about rewards, it was about their ability to present something back to her that indicated that we care, genuinely care.
Mike Ribero:And, by the way, there's a lot of evidence out there that brands that do a good job of loving the customer do charge more for their services because the customer appreciates that. The customer knows that it's about how I feel more than about what I get right, and it's that balance that's so critical to getting the commitment, the long-term commitment, from a customer.
Mike Giambattista:It would be good to talk about at this juncture what that kind of customer love can look like. What forms does it take practically speaking? And I know that, by the way, just to give a little foreshadowing here, part three in this series we'll talk in depth about those ideas about fixing what's broken. But at this point, when we're really trying to outline what customers are about and what they want, how's a company to address that? And maybe we do that by starting with what companies are looking for.
Mike Ribero:Yeah, well, let's go back to say it's easier than you think in terms of and you have to start somewhere, right? You know people talk about sending a card on birthdays and things like that. I believe some of the ways that you can really begin to reestablish the emotional bonds are things like, for example, an unanticipated reward, a thank you to a customer saying, hey, we really appreciate your business and we saw that you made this purchase the other day. Or we saw that you put this review in, or we saw that you referred this customer. Just acknowledgement that you're paying attention and that you appreciate what the customer is doing can go a very long way, Having being treated differently.
Mike Ribero:So when you have a customer service issue, if you're a loyal customer, you should get priority treatment, and that's fairly easy to do as well.
Mike Ribero:You should be trusted more because by giving trust, you receive trust in return, and beyond love, I would say that trust are the two factors that are most critical to long-term brand loyalty, and oftentimes people don't realize that by showing trust, you earn trust.
Mike Ribero:And yet a lot of programs today are designed for the one to half to 1% of people that are going to try to run a scam or defraud the program, as opposed to the 99.5% of the people that are really focused on helping the brand grow. Again, if you want to treat your best customers differently, showing them that you trust them is a really good place to start. There are a lot of different ways here, mike, to do that. Obviously, giving them an elevated tier that acknowledges, which again is recognition, to show, hey, you're at a different level because of your long-term commitment to the brand. And, by the way, that's another area that I think the industry has really lost focus is it's very much today. What have you done for me lately? So in the airlines, if you don't travel, you lose your status. It doesn't matter that you have 3 million miles on the airline.
Mike Giambattista:And that you've built up over years and years of loyal patronage.
Mike Ribero:Loyal patronage, and the short-sightedness of that is that individual may now be in a role like a CEO role or some other role, where they don't need to travel as much, but they can influence the issue of personalization and treating customers as individuals, which is a critical part of focusing on the emotional element, by taking personalization to the level I think the customer expects it, which is treat me like an individual.
Mike Ribero:And, by the way, mike, what's important here is I don't think it's enough in today's world to simply understand the customer in the context of your business, your vertical. You need to have a much more holistic sense of who that customer is and what they do when they're not doing business with you, not only to better understand them and be able to do things that might be unexpected, which will again help cement the relationship, but also to maintain your relevancy when they're not using you or when they're not buying you. And there are a lot of brands out there that have purchase cycles that aren't as frequent as a Starbucks, for example, where they have to work a little harder to maintain their relevance. And there's a lot of easy ways to do that just through communications and offering value beyond that kind of core, and that takes understanding. So understanding the customer and personalization, I think, goes hand in hand with building an emotional connection with the customer.
Mike Giambattista:I'm so glad you brought up the idea that companies could really benefit from a holistic view of their customers' lives beyond just that transaction that they've made or maybe even the surrounding ancillary transactions that would go into it.
Mike Giambattista:If you buy a car, you might buy additional mats or a warranty or something. But all of those other lifestyle factors age, geography and all the demographic factors that could be considered, as well as broader purchase history and there are some interesting things we'll talk about in the third episode here can produce something that actually approaches a 360-degree view of the customer. And think what you could do with that If you really had that view of your customer customer. And think what you could do with that. If you really had that view of your customer and it was really accessible to you and actionable, that you could design communications and rewards and engagement strategies around people the way they want to be engaged with would be revolutionary it really would and it would would and the brands that get there and get there first, would establish a standing in the mind of those customers that would be difficult for others to topple.
Mike Ribero:And that's why there's such an opportunity here for brands to really get in and understand customers by working with them, and that's part of the partnership idea. Right, there's no better way. Research is okay, but getting in and working with your customers and having them drive kind of the next generation, what what you focus on, I think, is is is the key, and you can't do that if you don't understand them kind of on a whole, as we said, as a whole, on a holistic basis.
Mike Giambattista:There's a. This is my own personal soapbox for just a moment. I'll make it a short one, but you know if, if we could create a timeline of the loyalty buzzwords over the past 10 years or so, you'd see things like uh, data is the new oil. You'd see things like you know, there's a big, a big section of that timeline that people be buzzing about gamification, you know, somewhere after that it would all be about experiential loyalty. And you know there's a whole list of these buzzwords that our industry an industry that we love, and the things we love to do for a living have decided. These are the things our industry is about right now. And yet what you're proposing, and in complete agreement with, is look at your customer holistically. These tools that were the buzzwords of the moment go into the toolbox as things that we can pull out and use on an as needed basis. Once we understand what our customer really wants, because we understand who they really are A groundswell starts small, quietly building into something powerful, unstoppable.
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Mike Ribero:By the way, mike, you mentioned gamification. There's such a potential for gamification to be abused, to be kind of deployed on a kind of a non-strategic basis just just for the heck of it, where it's not doing anything to habituate behavior, to reinforce a particular point. Gamification, if executed strategically, can be a huge benefit keeping people engaged, having them, entertaining a person and helping shape and mold the perception of a brand. But it has to be done in the context of what makes sense for that brand and again I'll get into examples of that in part three because I think it's very important.
Mike Ribero:The data side. I mean data was so central to the original design of these programs 40 years ago and it was lost for a very long time. Now, because of data privacy policies and legislation, it's become important again. I got to tell there's loyalty programs are in a unique position to address that issue and solve the problem for brands because they have all of the raw materials necessary to facilitate direct sharing of information between brand and customer. If they can build the trust, provide the incentive, I mean everything. All the raw materials are there.
Mike Giambattista:Yeah, I need another three or four jumping off points to pontificate, but I'm going to resist.
Mike Ribero:So let's talk about another thing that's really important because it'll become a segue to some of the other specific research out there. In today's consumer doesn't have any patience. It's all about more, better, faster or almost instant everything, and I think a lot of programs have lost their way by making things too complicated, too restrictive or too much of a hassle, which I think is what's really denigrated the value of loyalty currency today. What consumers want beyond the more, better, faster or as part of that is they want more opportunities to earn and more touch points or brands from which to earn it, and that's critical. It's well over 80% I think the latest study says 84% of customers or loyalty program members out there want the ability to earn for other activity beyond just making a purchase, and that's all up to the brand.
Mike Ribero:But there are a lot of ways that a customer can add value in today's marketplace that has a tangible ROI for a brand, whether it's referring friends and family, whether it's writing a review, a verified review, being an advocate on social media, doing a non-recurring activity like downloading a mobile app, with a lot of companies struggle with.
Mike Ribero:There are many ways a customer can add value and, as a matter of fact, the big question I ask people today that have a loyalty program is why would you focus only on transactions or purchases when there's so much a customer can do?
Mike Ribero:That's been proven to add value today, and so that really gets into the idea of expanding the activity which really has the potential of elevating the standard for loyalty, from advocacy, which is kind of a passive approach, to activism, where customers are actively working to support the brand, and, interestingly enough, those that are emotionally engaged are twice as likely to actively promote a brand than those that aren't emotionally engaged, and so everything kind of comes back full circle. The other thing is ecosystems. We're moving from kind of single brand programs to ecosystem-based programs, and I know that causes a lot of consternation on the part of the brands, but there are ways to do it that make both strategic and tremendous economic sense, where the value of the incentive increases almost exponentially without additional risk to the brand and where the costs are amortized over a group of brands, not just a single brand.
Mike Giambattista:As you said that, I think I heard a collective groan from all of the old school loyalty providers who kind of went oh no, no, no, not another ecosystem play. But what you're saying here is that I'm interpreting is that the original way to look at ecosystem had all kinds of problems, which is why it's been tried countless times here in this country, unsuccessfully. But that was an older view of how those things should work. And what you seem to be saying and I'd like to hear more about this is that ecosystems can be built and managed in a way where that value exchange is real and protected.
Mike Ribero:Absolutely, and where they're leveraging an existing ecosystem that isn't acknowledged as one. So, you look at a brand like T-Mobile, they have an ecosystem today of partners that participate in T-Mobile Tuesdays are now magenta status, as well as the hardware manufacturers in which they run their systems. Hotels and airlines have massive ecosystems of partners, and you can build ecosystems based on proximity of people in close proximity that are non-competitive. So I think we're letting terminology drive a discussion when, in fact, the basics for ecosystems exist out there today and just need to be exploited.
Mike Giambattista:We'll do our listeners a favor and drop this hint and just say that we're going to unpack that concept in great detail in the third episode. Suffice to say that the way Mike and his colleagues have conceived of modern ecosystem plays. It's an eye-opening thing to see.
Mike Ribero:So before we get too deep into the consumer or the customer side, let's go over to the brand side, because if not we could be here all day.
Mike Ribero:So before we get into the specifics of what brands need out of a loyalty platform and how they can deliver against what the customer wants in a way that's strategically viable and economically and that makes economic sense, we almost need to kind of take a step back into what needs to happen before we can even have that conversation and that really focuses on a brand clearly understanding in today's market what drives engagement for them.
Mike Ribero:Not every market is the same and we talked last time about how frustrating it was that a loyalty system designed for travel, which is unique in a variety of different ways from its aspirational value which is what gave the currency its premium tried to apply that into a retail environment or a grocery environment, didn't make a whole lot of sense and struggled. Every category and every brand has unique engagement dynamics and those are typically predicated on how those engagement dynamics compare to their competitive set and the best of breed providers, if you want to kind of establish a high watermark the consumer perceives their performance versus the competition, to give them a blueprint of where they need to be focusing their efforts and what they need to do, the kind of behavior they need to encourage or incentivize that's going to drive value for them, and a lot of brands don't get that right. So getting that right from the outset and benchmarking on key both rational and emotional elements of engagement I think are critical before any of this conversation makes sense for a brand in terms of what a brand needs.
Mike Giambattista:Look, you've done work with some really big brands over the years. I know that you've done work on certain levels for T-Mobile, as you've mentioned. Obviously, Hilton was a big one. You've been in the gaming industry with some fairly big brands there. What we're talking about here seems so basic. What are your engagement goals? What works within your particular industry and your vertical and your niche? What are your customers' expectations? But working with big brands where they're not starting with that understanding can be, really difficult.
Mike Ribero:Yeah, some yes, some no, Some are perpetuating, some are operating on inertia and trying to perpetuate the program they were given and trying to make it better incrementally. They were given and trying to make it better incrementally, and oftentimes loyalty sits apart from from marketing in some organizations and and that that, I think, is a, is a is an issue, and and so I think, mike, the answer to that is is, even if you just focus on a handful of of driving issues, you're going to be more successful if you model those and then drive behavior accordingly, without trying to boil the ocean. Focus on the basic relationship and what you can do to improve it, and what kind of behavior either can be habituated or where your knowledge, your more holistic knowledge of the customer, can buy you affinity and commitment that you're not getting today. And with that then you get into kind of the basics, the fundamentals of how a brand can make what they need work for them, and it really starts with a platform, an environment that allows the brand to engage directly with a customer, kind of on a level playing field, so there can be reciprocation, where a partnership can be facilitated, and for a lot of brands that's absolutely critical, because one of the ways that I've used as a metric about how successful loyalty programs are is how successful has the brand maintained their direct relationship with the customer?
Mike Ribero:And in today's world, a lot of brands have been disintermediated by third parties. Look at the restaurant industry with the delivery services. Look at the grocery industry with Instacart. Look at retail with Rakuten. All those have become kind of in the Rakuten's case a zero-sum game where everybody participates. Now the rebates that are being paid through the affiliate network is coming out of the gross margin to the delivery services, which are oftentimes paying 30% to 35% of gross margins which are really thin in the restaurant industry to a third party. And the long-term concern that I have is those parties will start, the consumer will then start relying on those third parties as opposed to the brand, and they will be the beneficiary of all the data and the core relationship.
Mike Giambattista:It's already happening. You can pick almost every one of those instances and see that the disintermediation is creeping.
Mike Ribero:Yeah, so there needs to be a platform that facilitates that direct relationship, where there's an intrinsic incentive for the customer to work directly with the brand, where the opportunity cost of not doing so is significant enough, both rationally and emotionally, where they wouldn't even consider it and we'll talk about that in the next session. But that's really critical, because leveling the playing field is the only way that you can structure a partnership. That's right, go ahead.
Mike Giambattista:No, I was going to say completely agree. I mean you can't tell because it's a podcast, but I'm nodding violently in agreement here with what you're saying. I wanted to talk a little bit about the ecosystem idea we brought up a few minutes ago as it relates to the corporate wants and needs needs. From the consumer side. It gives them more opportunity to redeem On the burn side of the equation, more opportunity for deeper customer engagement and better satisfaction and all that. But on the brand side, what's in it for them in an ecosystem kind of play, and how would that look for?
Mike Ribero:for them in an ecosystem kind of play. And how would that look? Well, it depends on how it's structured. Um, if you were to do it with a brand and its partners, the, the, the brand, would be the, call it the general partner, and all the other uh partners would be the limited partners. Um and uh. Um, and again, the general partner is the one that owns the large customer base, and the benefit for the brand is they're giving their customers a real opportunity to earn, to be part of something that provides real material value, both rationally and emotionally, across a broader cross-section of brands so it's meaningful across a broader cross-section of brands. So it's meaningful. And they basically can capitalize on this ecosystem without having to join 17 different programs.
Mike Ribero:So, there's real benefit for them, For the individual or the participating brands, all of them, you know. See the fallacy out there is that my customer is not your customer as well, right? So a T-Mobile customer is not also a Home Depot customer? Is not also a Target customer? Is not also a Gap customer? No-transcript them to.
Mike Ribero:And so there's a scalar network effect, you might call it, that is available through an ecosystem, that isn't available through a single brand platform and that gives the brands involved the opportunity to get a bunch of learning, to leverage data and because the currency that they now offer has value that rivals cash, and obviously, the bigger the ecosystem, the greater the value, and that's one of the biggest things consumers want, which they want more opportunities to earn, and they want a currency that isn't constantly devalued, isn't limited in its scope and doesn't have to go through a redemption process that chases people away. Today, making the currency so devalued perceptually that it's just going to continue to accrue, and that's what's been happening over the last five years is people are redeeming less, which is creating liabilities for sponsoring brands that are continuing to grow.
Mike Giambattista:You mentioned in our last conversation the sum total value of unredeemed points in this country was something huge. It was basically the economy and then a subset of that still huge was the value of those unredeemed points in the airline industry. Do you recall what that number was?
Mike Ribero:Because it was so the total value, mike is depending on the source, across all points and miles across every industry vertical, is between 100 and 150 billion. I will tell you that the average airline today, if you look at the publicly available data on balance sheet of United America and Delta, they're averaging somewhere between $7 and $9 billion in reserves against both short-term and long-term liabilities, short-term being the miles that will be used in the fiscal year and long-term being those that are being deferred and will be used sometime down the road.
Mike Giambattista:Can you imagine what would happen to any one of those entities if consumers suddenly decided to go redeem them?
Mike Ribero:Well, number one they couldn't handle the capacity. It would be like run on the bank.
Mike Giambattista:Yeah, it really would.
Mike Ribero:And obviously and that's a big problem is the airlines and hotels. But the airlines in particular didn't adjust. There's this disconnect between hey, the loyalty program and the airline, and sometimes people forget that without the airline the loyalty program has no value, forget that without the airline, the loyalty program has no value. And that's why it troubles me that the program continues to grow as the airline contracts and yet they're still out there. The airlines are still out there marketing their miles to third parties if you buy a mortgage, and that just creates pressure on the customers they're supposed to be taking care of. That's another thing that has to change.
Mike Giambattista:And we'll talk about solutions for that again in episode three, which I'm hoping you'll tune in for. It's going to be a fascinating discussion here, because we're laying out problems in this first and second episodes, but the solutions all come in the third. But the solutions all come in a third. Let's move on to some of the other needs that brands corporations might be looking for in a loyalty program.
Mike Ribero:So there's a few more that I think are worth discussing.
Mike Ribero:One is greater flexibility and adaptability, so you don't have a one-size-fits-all approach and so the solution, the platform, can be tailored to the market in which it's being deployed.
Mike Ribero:That's critical, and today the basic architecture of a loyalty program, which were designed for travel, really don't lend themselves to a lot of other applications without some significant compromises, that kind of limit its effectiveness, without some significant compromises, that kind of limit its effectiveness. We need a brands, need a different currency that can restore the original value and intent without breaking the bank, so to speak, and ultimately address the issues that they're having with liability accrual, and we're going to talk about that because there is an answer out there. They also need a solution to the data privacy issue, and we talked about that a little bit, but there's nothing more important than understanding the customer and what's important to that customer. So you're kind of looking at them as an individual, not a customer, and you're looking at them beyond what they do when they're doing business with you. But maybe, mike, the most important issue that I think is critical is how the industry deals with the mass deployment of technology and the impact that that's had on the human experience and human contact. What do you mean by?
Mike Giambattista:that we're all in love with technology in this industry, but maybe you not so much.
Mike Ribero:So I believe there's a place for technology, but what happened is technology in many situations supplanted the human contact that facilitated a personal relationship with a brand and the emotional connection that comes with it. So today we're talking to automated attendants, chatbots or, in the best case, sometimes it's talking to people in a foreign country that don't understand our lifestyle. They can't empathize with us. They do a great job, but it's not like you feel like you can identify and you don't feel like they're empathizing with you and the companies that are making an effort to address that issue.
Mike Ribero:I'm all for adoption of technology if it doesn't swing the pendulum all the way over, so it becomes a sterile experience that precludes any kind of emotional attachment. As a matter of fact, there was a study done by Global Web Index that says that tech fatigue, which we're starting to experience more and more as more and more technology is deployed literally market-wide, makes consumers crave the human experience, and they have a lot of data behind that, and that's one of the reasons behind the popularity of brands like Etsy, for example. Those are handcrafted, human-driven products and services that people that are kind of experiencing tech fatigue are opting for, because it's the antithesis of technology.
Mike Giambattista:Yeah, yeah.
Mike Ribero:And so I think and again I'm not saying we go back to the Stone Age, but I'm saying let's kind of balance the deployment of technology and let's make sure that we don't lose touch with our customers and they don't feel like we've gone from being their ability to personify the brand in some way to the brand just representing some kind of distant, iconic and unem entity that they can't connect with.
Mike Giambattista:Which sort of goes back to, uh, one of our first statements. To bring this conversation full circle here Uh, you know, how does a consumer choose which brands to be loyal to, and in this, this woman's case, it was whichever brand loves me most. But that takes a certain amount of authenticity. You can't, you can't feel love from. You know uh something without a soul.
Mike Ribero:Right, you can't, you can't be loved by a machine.
Mike Giambattista:Right, it's not yet Um and maybe at some point, but not now.
Mike Ribero:Yeah, and again and this gets back to the. You know we're going to make mistakes. This whole industry kind of is a trial and error based, but you've got to try and again. When loyalty was first developed and we talked about kind of going back to basics and the opportunity cost, the how do I feel and what do I get but one of the key tenets of keeping people engaged was a commitment to continuous improvement. And I look at the industry today and I literally struggle to think about what kind of disruptive innovation has taken place in the last 25 years in loyalty last 25 years in loyalty.
Mike Giambattista:I'd be hard-pressed to find those points. It all seems to be incremental improvements, lots of those, lots and lots of them that are noteworthy, but anything you'd call revolutionary conceptually, I haven't seen it in a long time.
Mike Ribero:You know, back kind of as these programs were evolving and Eastern and Continental got together to create OnePass. There was a litany of innovations just in the creation of that program the two-tiered reward structure, the ability to buy mileage, and the first branded credit card which let you earn for spending. Those, I think, are the kinds of innovations that are few and far between, if at all, in today's world, and that's got to change. That's got to change.
Mike Giambattista:Well it's, you know, just taking out the crystal ball for a minute, you know, between the conversations that you and I are having you're having with other folks as well, the conversations I'm having in and around this industry I'm going to say that we are approaching an inflection point, because there are people who are genuine innovators out there thinking about these problems, but we've also got technology at our fingertips that's going to enable things that we couldn't really even conceive of two, three, four, five years ago.
Mike Ribero:I completely agree. But it takes the commitment on the part of the companies involved to not wait to see what others do and follow them, but to take leadership, because in this game, leadership pays dividends. If you can be the thought leader in this category and create the responsibility of driving change, the consumer will reward you for it.
Mike Giambattista:Here, here. So we're going to talk about the fixes for all these problems that Mike and I have been outlining and delineating over the past few minutes. I'm going to invite you and encourage you to tune in to Episode 3. We will have these all packaged together with appropriate links, but for now, mike Ribeiro, thank you for your time and your thinking.
