AIRLINES & ALLIANCES

Adam Posner presents “The Professor And The Practitioner” 3-episode series on secrets of loyalty with Professor Cristina Ziliani, University of Parma, Italy

Episode 1: "Exploring the Evolution of Customer Loyalty" with Professor Cristina Ziliani, University of Parma, Italy covers evolution of customer loyalty, the role of loyalty management, and the transformation of loyalty programs over time. Episode 2: " The Evolution Of Loyalty Management " identifies major trends shaping loyalty marketing and the customer experience. Episode 3: Addressing Sustainability Challenges

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Episode 1: The Professor and The Practitioner: Exploring the Evolution of Customer Loyalty.

Watch Episode 1 of 3 – The Evolution Of Loyalty Management  

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The 1st episode of The Professor and The Practitioner vlogcast miniseries brings together two leading voices in the loyalty industry: Adam Posner, CEO and founder of The Point of Loyalty, and Professor Cristina Ziliani, a marketing expert from the University of Parma, Italy. The discussion provides valuable insights into the evolution of customer loyalty, the role of loyalty management, and the transformation of loyalty programs over time.

Key takeaways: 

1. The Evolution of Loyalty Management: Professor Ziliani presents a structured framework describing how loyalty management has evolved over time. She outlines three key phases:

• Phase 1: Loyalty Programs (1980s–2000s) – The emergence of structured loyalty schemes, initially pioneered by airlines and later adopted by supermarkets and retailers. These programs were designed to retain customers through rewards and incentives.

• Phase 2: CRM (2000s–2010s) – Companies began leveraging customer data and segmentation to personalize communication and drive long-term customer engagement.

• Phase 3: Customer Experience Management (2010s–Present) – Businesses have shifted focus toward delivering superior customer experiences, using data, technology, and AI to enhance personalization and engagement.

2. What Defines Loyalty Management? The conversation clarifies that loyalty management is not just about running a structured program. Instead, it involves a strategic approach to customer retention and engagement. Ziliani notes that companies can take two paths:

• Formal loyalty programs: Structured, rule-based rewards systems, such as points-based programs.

• Non-formal loyalty strategies: CRM-driven customer engagement that fosters loyalty without explicit program enrollment.

3. The Role of Digitalization and Gamification in Loyalty: A major shift in loyalty programs is the increasing use of digital tools and gamification to enhance customer engagement. Ziliani notes that customer preferences are shifting toward interactive and gamified loyalty programs, which traditional schemes may struggle to keep up with.

• Many retailers, particularly discounters like Aldi and Lidl, have launched digital apps instead of traditional plastic loyalty cards. These apps offer personalized promotions and exclusive discounts.

• Gamification elements, such as interactive promotions and digital treasure hunts, are gaining traction, making customer interactions more engaging and fun.

• AI-driven personalization is helping companies tailor their offers and communication based on customer behavior, enhancing the overall experience.

4. Defining a Loyalty Program: The Expert Perspectives: Adam Posner offers a precise definition of a loyalty program: “A loyalty program is a long-term planned structure of ongoing recognition, rewards, and benefits to enhance a customer’s life in exchange for influencing behavior, belief, and belonging.” Ziliani agrees and praises the definition, acknowledging that loyalty programs must offer both transactional and emotional value to customers.

5. The Future of Loyalty: AI, Customer Engagement, and Sustainability: Looking ahead, Ziliani emphasizes that AI will play a significant role in shaping the future of loyalty programs, particularly in predictive analytics and customer engagement strategies. Additionally, sustainability is becoming a major consideration for loyalty programs. Companies are exploring ways to incorporate eco-friendly rewards and sustainable business practices into their loyalty strategies.

The discussion between Posner and Ziliani underscores that loyalty management is an evolving field. Businesses must move beyond transactional rewards to focus on customer engagement, personalized experiences, and long-term relationship-building. As loyalty strategies continue to evolve, integrating AI, digital tools, and sustainability initiatives will be key to maintaining customer retention and brand loyalty.

Episode 2. The Professor and The Practitioner: The Future of Loyalty Programs

Watch Episode 2 of 3 – The Future of Loyalty Programs

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In Episode 2 of The Professor and The Practitioner vlogcast, Adam Posner, CEO of The Point of Loyalty, and Professor Cristina Ziliani from the University of Parma, delve into the future of loyalty programs. The discussion identifies major trends shaping loyalty marketing and the customer experience, focusing on three fundamental forces: societal shifts, technological advancements, and artificial intelligence (AI).

1. Societal Shifts and Changing Demographics: One of the biggest influences on the future of loyalty programs is demographic changes. Professor Ziliani highlights two key trends:

• The Aging Population: Countries such as Italy already have a large percentage of people over 65 (23% compared to a global average of 6%). Loyalty programs need to adapt by providing benefits tailored to older generations, including user-friendly interfaces and personalized offers.

• Generation Z’s Digital Expectations: As Gen Z (ages 18-25) enters the workforce and gains purchasing power, businesses must design loyalty programs that align with their digital-first habits. Many loyalty programs are designed without a specific generation in mind, which can limit their effectiveness.

Adam Posner adds that while brands often claim their programs cater to everyone, successful loyalty initiatives require targeted approaches based on generational behaviors, spending patterns, and digital preferences.

2. Technology’s Expanding Role in Loyalty: Professor Ziliani emphasizes that the rise of digital touchpoints is transforming loyalty marketing. Research from AC Nielsen’s Consumer Panel shows that consumers now interact with an average of 11 different brand touchpoints over three months—a number that has increased from seven touchpoints four years ago.

Key digital touchpoints include:

• Brand apps

• E-commerce websites

• Social media engagement

• Digital and paper coupons

• Home delivery services

The rapid adoption of digital loyalty apps is particularly significant. Discount retailers such as Aldi and Lidl, traditionally hesitant to launch loyalty programs, are now leveraging mobile apps to offer personalized promotions and gamified experiences without traditional point-based systems. This shift demonstrates how retailers are using technology to drive engagement without structured loyalty schemes.

3. AI and Generative AI: The Next Loyalty Game-Changer: Artificial intelligence is set to revolutionize loyalty programs, offering new ways to personalize customer interactions and enhance experiences. Professor Ziliani breaks AI’s impact into two major categories:

• Predictive AI: Used to forecast customer behaviors, predict churn risk, and optimize promotions based on customer preferences.

• Generative AI: Creates personalized content, adjusts communication styles, and enhances user engagement with AI-powered chatbots and recommendation engines.

A real-world example is Alaska Airlines’ AI-powered travel agent, which helps customers find flights and optimize point usage based on their travel preferences. Such innovations enable seamless, customer-centric loyalty experiencesby making it easier to redeem points and access benefits.

The discussion between Adam Posner and Professor Cristina Ziliani underscores that the future of loyalty programs is deeply connected to:

• Understanding demographic shifts and designing programs for specific customer groups.

• Leveraging digital technology to enhance customer interactions across multiple touchpoints.

• Utilizing AI and automation to personalize rewards and engagement.

As Kevin Kelly, co-founder of Wired, once said, “The future happens very slowly, and then all at once.” Loyalty programs are undergoing a transformation that, while gradual, will soon redefine how businesses engage and retain customers.

Episode 3. The Professor and The Practitioner: Addressing Sustainability Challenges

Watch Episode 3 of 3 – Addressing Sustainability Challenges

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In Episode 3 of The Professor and The Practitioner vlogcast, Adam Posner, CEO of The Point of Loyalty, and Professor Cristina Ziliani from the University of Parma, examine the struggles and opportunities of integrating sustainability into loyalty programs. The discussion explores how brands attempt to connect their loyalty strategies with environmental and social responsibility, the challenges they face, and solutions to make these programs more effective.

1. The Growing Focus on Sustainability in Loyalty Programs: Professor Ziliani explains that sustainability has become a top priority in corporate strategy, and loyalty programs are seen as an ideal channel to engage customers in sustainability efforts. Many companies are attempting to align their Environmental, Social, and Governance (ESG) goals with customer loyalty initiatives. However, research reveals a gap between corporate sustainability strategies and loyalty programs, with many companies failing to integrate the two effectively.

2. The Rise and Fall of Sustainability-Focused Loyalty Programs: A 2024 study conducted by Ziliani’s team analyzed 90 sustainability-driven loyalty programs across 20 industries and 15 countries. The findings revealed a surprising trend:

• Over 25% of these programs had been discontinued within a short period.

• Many of these programs were experimental but failed to resonate with consumers or align with corporate strategy.

• Programs that lacked long-term commitment and authentic integration into the brand’s mission often failed.

3. Three Approaches to Sustainability in Loyalty Programs. Ziliani classifies sustainability initiatives in loyalty programs into three distinct levels, based on the degree of company involvement and effectiveness:

1. Minimal Effort – Customer-Led Giving

• Companies provide an option for customers to donate their points or cashback to charitable or environmental causes.

• The brand itself does not invest significantly in sustainability; instead, the responsibility is shifted onto the customer.

• Research shows that this approach does not drive customer retention or increase loyalty engagement.

2. Mid-Level Effort – Rewarding Sustainable Behavior

• Brands actively incentivize sustainable choices by offering extra points or discounts for eco-friendly behaviors.

• Examples include:

  • Returning used packaging (e.g., cosmetics containers or bottles) for recycling.

  • Choosing second-hand or sustainably sourced products.

  • Reducing energy or water consumption.

• Customers are encouraged to adopt sustainable habits while receiving tangible rewards, making this approach more effective.

3. High Commitment – Integrated Sustainability Programs

• Companies fully integrate sustainability into their loyalty programs, aligning it with corporate mission and brand values.

• Examples include:

  • Energy providers rewarding customers for reducing consumption.

  • Supermarkets tracking the carbon footprint of customers’ purchases and providing recommendations for greener shopping.

  • Businesses directly matching customer donations to amplify impact.

• This approach is the most effective in building long-term engagement but requires strong corporate commitment and alignment with sustainability goals.

4. The Psychological Challenge of Sustainable Loyalty Programs. Professor Ziliani highlights the fundamental challenge of engaging customers in sustainability:

• Sustainable behaviors often require sacrifice (e.g., reducing consumption, paying more for eco-friendly products).

• The benefits are long-term and collective, unlike typical loyalty rewards, which provide immediate gratification.

• Companies need to balance sustainability efforts with customer motivation, using gamification, education, and clear incentives to encourage participation.

5. Recommendations for Loyalty Programs Seeking to Integrate Sustainability. Ziliani offers key recommendations for companies looking to make sustainability a meaningful part of their loyalty programs:

• Avoid superficial ESG initiatives. Merely adding a donation feature does little to build loyalty.

• Incentivize sustainable behavior. Reward customers for actions that align with sustainability goals.

• Ensure corporate alignment. Sustainability-focused loyalty programs should reflect broader business objectives and brand identity.

• Make sustainability engaging. Utilize gamification, social impact tracking, and personalized insights to encourage long-term participation.

Sustainability as a Loyalty Strategy, Not an Afterthought. The episode concludes with a thought-provoking discussion on how loyalty programs can successfully drive sustainable customer behavior while reinforcing brand values. While many sustainability initiatives in loyalty programs fail due to weak integration and lack of long-term commitment, those that align with a company’s overall mission and actively engage customers in meaningful actions can create lasting impact.

Source: Adam Posner, The Point of Loyalty.