This article contains a text transcript (with embedded video) of an interview featuring Don Smith, the Global Consulting Officer for Capillary Technologies and Brierley, a Capillary Services Company. Loyalty360’s Mark Johnson hosted the interview.
This interview was part of Loyalty360’s Loyalty Live interview series. The original video interview was uploaded to YouTube on October 31, 2023, by Loyalty360. The transcript was edited by Trevor Antley.
Don Smith: My name is Don. My passion is data-driven insights. I started my career as a university professor for the first 11 years, teaching people to analyze data and mine programs, and look at whether or not things were working. I loved doing that, but I transitioned 16 years ago into consulting, and that’s when I started with Brierley.
My passion is really building effective engagement solutions, whether they’re structured or just fantastic ‘lowercase-L’ loyalty ideas or constructs that go into the market. I love to mine data, and so at Brierley right now, I lead analytics, strategy, and research. It’s very exciting for us to bring those components to bear to the larger set of Capillary products and services.
Host: In 2023, Capillary acquired both Brierley and Tenerity’s Digital Connect assets. Can you tell us about the integration, how it’s gone, and what’s happened since the acquisitions?
Don Smith: It has moved at 1,000 miles per hour! But I think these acquisitions were very strategic and well-thought through. I kind of think of it as chocolate and peanut butter and marshmallows coming together in a very complimentary way, and that’s been exciting. So, for Brierley, we’re bringing the consultancy and that perspective to bear, and that’s been fantastic.
The Digital Connect assets have been rebranded as Rewards+ under the Capillary product catalog. For those that aren’t familiar, this platform — Rewards+ — identifies and catalogs thousands of intelligence-based offers like cashback, cardlink offers, vouchers, discounts, and experiences that members can source and enjoy. The idea is that every reward will inspire greater customer loyalty and be very personalized. With that Rewards+ acquisition, we have the broadest offer and partner network of any company in the market today doing loyalty.
We’ve got tremendous commercial flexibility, which means we can deliver value back to customers into the business and really generate profitable loyalty. Brierley brings the consulting, Rewards+ brings the platform, and it all fits into what we think is a best-in-class solution with Capillary’s Loyalty+, Engage+, and Insights+ platforms. It’s the most feature-rich platform in market for loyalty with the greatest functionality, and we’ve added on these things that truly complement it and round it out.
Host: Let’s dig into this a little bit on a couple of different fronts. So, the Brierley name will remain, and you’ll be positioned as a "Capillary Services Company". Why are you most excited about this, and why keep the Brierley name around?
Don Smith: Brierley really is for the consulting — analytics, strategy, program design, research capability, emotional loyalty measurement. That’s where we’ve had our highest reputational capital as a brand. We’ve been at it for 35+ years; people know us and trust us for consulting. It’s been a growth area for us over the past decade, so it just makes sense to bring Brierley with the reputational capital in North America and Europe to bear in the larger Capillary family of products.
What I’m most excited about is that we’re keeping that consulting capability within Brierley while incorporating Capillary’s digital platform and services so we’re all part of one team now. What’s really exciting about that is when I go in, we spend a lot of time designing or optimizing loyalty programs and getting them right, while we’re working that process, we’re also able to start digital design work at the same time. So while we’re concepting and ideating and refining the program mechanics and validating those through the usual things like financial modeling and voice of customer research, we’re also building out clickable digital prototypes that start creating more digital assets and making the experience come to life while we’re designing the program.
At the end of these designs, our members get a best-in-class loyalty program ready to hit the ground running with a digital solution already there. I think that’s really a winning solution that no one else is offering today. We just couldn’t be more excited about it.
Host: Many brands are looking at their customer value proposition to make sure that there’s alignment, make sure that it’s driving engagement, and that requires out-of-the-box thinking with a great strategy company like Brierley, but also having the correct reward assets that can speak in a personalized manner can drive engagement.
Don Smith: There are no round pegs going into square slots; this is really everything fitting together nicely. With Tenerity’s former Digital Connect assets now rebranded as Rewards+, it aligns with the other products in the Capillary Suite. Capillary’s Loyalty+ and Engage+ solutions, the loyalty engine, and its communications platform are clearly best-in-class, feature-rich, SaaS-based, and really and truly self-service with an interface that is just so easy to use. We know we have a best-in-class technology platform.
The creation of — or rather, the rebranding of — Rewards+ is just the logical extension of that feature-rich platform. The platform has baked-in analytics and AI. In fact, the loyalty and insights plus modules have nudges that occur, mining data, and will actually suggest things to do proactively to improve campaigns and program performance, all of that cast through cool decision models.
Now, enter this platform that offers all of these offers and rewards and experiences, and that same type of AI, and those same algorithms are being used to create a constellation of very personal and personalized offers to consumers, constantly learning and adapting, really trying to build authenticity so that members see value in what a program is offering. So it just fits this focus on making sure programs hum, is complimentary to offering more solutions that will work hard and make loyalty programs work harder, but really deliver value at the end of the day to the consumer. Done correctly, there’s a monetization of loyalty assets that can occur as well.
Host: Capillary recently introduced the concept of Generative Loyalty. Can you explain what that is, what does it really mean, and what does this mean for the industry?
Don Smith: We’re excited about Generative Loyalty ! It’s a play on generative AI, which is clearly a trend everyone’s talking about. If you’re to define generative AI, it’s artificial intelligence capable of generating texts, images, content, and other media using generative models. These models are algorithms that learn the structure and pattern of their input or training data, and then take that and populate new data — that’s the generative part. There’s training and simulation that leads to greater optimization, which is the basis of AI.
Let’s take that logic and extend it forward to Generative Loyalty, where these data assets that are enabled by loyalty, we can mine all of the customer data points, all of the transaction data points, get to greater personalization at scale, so that every campaign, every value proposition, every real-time inflection point where we’re serving up content, is part of this laboratory of data democracy.
Generative Loyalty is going to uncover insights, constantly optimize the customer experience, enable the next best actions, and if we do it right, it’s a win-win solution. Customers see more value, it feels more authentic, and the brands enjoy greater loyalty and might even make their loyalty programs profit centers if they really work in the right set of partner and affiliate networks.
Host: How does Generative Loyalty align with the trends that you see within the industry?
Don Smith: Generative Loyalty is pivotal because it allows for reward choice, which is essential in today’s market. Gone are the days of one-size-fits-all loyalty programs. Now, it’s about offering a variety of rewards and styles, letting members choose what suits them best. This approach not only offers authenticity, which is a major trend but also fosters emotional loyalty.
Moreover, generative AI in loyalty programs can transform them into profit centers. This is particularly relevant given the growing interest in paid memberships, like those of Starbucks or American Airlines. Not every brand can replicate this model, but through partnerships and value-driven loyalty programs, brands can create profitable ventures outside of traditional paid memberships.
Host: What are some key factors that drive customer loyalty in today’s market, and what strategies can address these?
Don Smith: The key to loyalty lies in the blend of value and brand alignment. There’s rational loyalty, which necessitates good products, fair pricing, and reliable customer service. This forms the base for emotional loyalty. Personalization is at the heart of this. Many brands claim to personalize, but often, it’s more generic than individualized. True personalization, reflecting a customer’s unique choices and preferences, builds an authentic relationship. Also, simplicity in loyalty programs is crucial. They must be easy for members to understand and use, offering immediate gratification.
Host: What advice would you give to brands looking to innovate their loyalty programs?
Don Smith: My primary advice is not to overcomplicate things. Brands often feel the need to incorporate every new trend, but it’s more effective to focus on a small set of customer behaviors that can significantly impact the business. The goal is to create a win-win situation where both the customer and the brand benefit. This balance drives loyalty and consolidates the customer’s share of wallet with the brand.
Host: Looking ahead, what are some upcoming technological opportunities and tools that brands can expect?
Don Smith: Several technologies are set to make a big impact. Facial recognition, for example, is emerging as a secure and convenient form of customer identification. Zero-party data is also becoming increasingly important, especially with the decline of cookies. Brands that responsibly use and protect customer-provided data can build stronger relationships. We’re also seeing a rise in post-materialist loyalty trends, where younger consumers seek alignment with brand missions and values, such as sustainability and social responsibility. Incorporating these elements into loyalty programs can be very effective.
Host: Any final thoughts or advice for the market or insights into your organization’s future directions?
Don Smith: My advice is to focus on creating value for customers that creates value for the brand. Emotional loyalty is an investment that pays off over an extended customer lifetime. At Capillary, we’re working on real-time emotional loyalty measurement tools, enhancing our Brierley Loyalty Quotient (the BLQ), and finding innovative ways to make loyalty transcend mere transactions.
Capillary Technologies and Brierley, a Capillary Services Company, employ the top loyalty experts and industry thought leaders worldwide. Our loyalty strategists and data consultants, combined with an industry-praised technology platform, can help brands improve their engagement strategies through data analysis.
By collaborating with the Capillary and Brierley loyalty experts, brands can navigate the intricacies of data analytics, unravel insightful findings, and craft engagement strategies that resonate with their unique customer base. Contact us today to learn more!