Platforms such as Spotify, Amazon, and Netflix have not only innovated how people consume music, shop for everyday items, and watch movies and television—they have also permanently transformed the relationship that consumers have with brands.
By training consumers to expect experiences tailored to their preferences, these platforms have made personalization, convenience, and seamless omnichannel experiences increasingly non negotiable features that brands are expected to deliver with their products and services. Ian Young, Senior Director & Head of Business Development at Comarch, also sees these shifting consumer expectations playing out with loyalty and rewards programs today.
To build lasting emotional loyalty among their members, brands must now think beyond just points and make personalization a key cornerstone of their programs. And to effectively embed seamless personalization across all the channels of their loyalty program, brands must invest in artificial intelligence, according to Young.
“We think AI is really creating an inflection point for loyalty, where we know that loyalty really drives a share of wallet and key indicators, but the way it's going to be done in the future is going to be completely transformed,” he said. “And so, it's really important to stay ahead of that around AI and personalization.”
Comarch, which is a producer of IT solutions and a system integrator, helps power over 100 loyalty programs across the globe as an end-to-end platform utilizing proprietary technology. Young notes that the company has been doubling down on its AI investment, putting a significant focus on AI segmentation and omnichannel communications.
Comarch works with companies across all industries, but has had particular success with brands in retail, travel, automotive, and finance and banking. The company sees its heavy investment in AI as a key differentiator for what it can offer brands.
“Our goal is to turn things like raw data into personalized engagement that sticks and ultimately that drives the bottom line for our businesses that we work with,” Young said.
Evolving from Earn and Burn
The focus on refining and elevating personalization through AI has become more imperative as loyalty programs have evolved from what they were in prior eras. Young points to early rewards programs launched by Starbucks and airlines that were primarily designed to earn and burn points.
While this remains an important feature of many loyalty programs and still draws in new members, the programs are evolving to deliver richer experiences. Young sees loyalty programs as being more of a two-way exchange than they used to be, especially as data is being exchanged between the consumer and the brand.
“The relationships are more complex and more multifaceted, which I think means the technology needs to keep up with that,” he said. “And I would say that loyalty should be thought about as a lifetime value tool.”
While earn and burn will still have its place in a loyalty program, brands need to use tools like AI to strengthen their relationships with their members.
“If you have loyalty with some of that transactional piece, but also with some of those emotional overlays, it’s a way of helping them engage emotionally with the brand, and I think you can build loyalty into something that drives enterprise value,” Young said.
Loyalty as a Long-Term Value Prop
One of the ongoing discussions leaders in the loyalty space continue to be engaged in is how to effectively convey the value propositions of their programs to their chief financial officers and others on the business side of the business. This can become even more challenging when upgrading the loyalty program with AI could require a significant investment.
Young thinks it’s important for brands to take a long-term view of the ROI around loyalty programs.
“It does take investment to get there both in the value proposition, but also the technology to deliver it,” Young said. “When you buy a platform, you're not buying it for six months; you're buying it for five, six, seven years. You're building that program over sometimes decades.”
This requires close alignment on the value of the program across the company. The loyalty program needs to be seen as both something the company must spend money on, but also as an opportunity to drive revenue.
"In almost every instance that I see it brings value across the entire enterprise,” Young said.
Start Small and Think Big
Comarch is continuing to accelerate its AI native roadmap, focusing on agentic automation, improvement in fraud prevention, and growing the commerce side of its platform. The goal is to focus on the lifetime value that its customers can generate from AI, according to Young.
The company will also continue to work with its customers to build out their own AI platforms, which often starts with a discussion around data. For some brands, their data doesn’t reside in one place, or the data hygiene is lacking.
Young notes that this can be a “huge hurdle” for brands because AI will only be effective if it has the right data behind it. But once a company gets its data in place, Young will often suggest starting with small AI pilots first and layering on AI capabilities—such as simple customer scoring—to get everyone aligned on its value.
“You build confidence internally, not just across your team, but across the stakeholders as well—finance, compliance, and so forth,” he said. “You start to crawl, and then you walk, and then run.”
Once they have cleared these smaller hurdles, brands can shift into making AI a foundational part of their program so that it becomes more native, rather than just an add-on.
“You want to make sure that you're investing in technology that is also investing in the future because it is going to move super-fast,” Young said. “It is already.”