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PegaWorld iNspire 2023: Inspiring Loyalty Through Personalization With Purpose

Brands build loyalty through trust. And they build trust through exceptional experiences. Exceptional experiences begin with exceeding consumers’ expectations through personalized engagement that demonstrates brand promise meeting consumer need. That’s personalization with purpose. Join this session to learn how EY and Pega Customer Decision Hub™ help brands build loyalty throughout the customer journey by delivering personalization with purpose – turning your brand’s engagement into an engine for sustainable growth.


- Welcome to the session and we're gonna be talking about inspiring loyalty through personalization with purpose. I'm here, I'm Suzanne Clayton from Pega. I'm actually the global alliance leader for Pega for EY. But I am here to do the introduction for our speakers in the session. So Steven Bailey is a partner at EY in Chicago and serves as the America's leader for customer and growth for consumer good. Steven has 25 years of experience helping clients achieve sustainable growth through high performing marketing, commerce, customer experience, and loyalty. And then we have Prasad Krovvidi. He is a managing director for EY in Houston and he leads personalization for their digital and emerging technologies group with a focus on Pega CDH. He has more than 16 years of experience in the Pega ecosystem delivering decisioning solutions across various sectors. So in today's session, Steven and Prasad will be sharing EYs perspective on the evolving loyalty landscape. I'm sorry, my phone's ringing. Oops. Including current trends and how customers can leverage personalization with purpose to drive trust, loyalty, and growth. So with that.

- All right. Got mics? Good. Thank you, Suzanne. Well thank you everybody for joining us today and finding us all the way, I think we're at the end of the hall, so thank you for coming down. We're gonna talk about a couple of exciting topics and we're gonna show a demo as well. And we're gonna do a live demo, so pray to the demo gods. But the two topics we're gonna talk about, really, are loyalty and personalization, right? These are topics everybody seems to be talking about, nobody, or very few, are really doing it well. So show of hands, who can think of a brand that you are loyal to that has a great loyalty program? You just love going back every time. Think the loyalty, right? Couple, right? Couple. How many know brands who do personalization right, with you as a consumer? Really bring the best next relevant action, option, reward. Nope, right? And we've had this technology around for a while, and everybody's talking about personalization, and today we're gonna talk about personalization with purpose. I use that as a way to counter that against hyper-personalization. I think hyper-personalization personally is over-hyped, right? We're not gonna do one-to-one all the time, 24/7, in everything that we do. But we need to have smarter and smarter audience segments so that we know how to really reach our target consumer audiences. And then we need to be able to do personalization at the right time, in the right way. 'Cause otherwise you also run the risk of being creepy, right? That's the other side of personalization. If we were hyper-personalized all the time, always one-to-one, it starts to sometimes get a little bit creepy, depending on how it's done. So there's an art. There's an art and a science. Now for loyalty programs, we know that everybody is, right now all of our clients are rethinking, re-imagining loyalty programs, or smaller brands especially, trying to establish them for the first time. And we know that we hear a majority of consumers say, if there's no personalization in the way that I am engaged by a brand, then I'm like, I have no loyalty. I'm likely to go somewhere else. And the reason that is, is that loyalty itself is really based in trust. And personalization is about gaining trust. It's about saying, "Hey, I know you enough. You've been giving me your business. You've been telling me about yourself. You've been sharing things with me, and I have something to offer in return that is of value to you." And that's the important point, is that it has to be of value to the consumer, and it has to be done in a way that engenders trust, 'cause that is really the basis of loyalty. So, to figure out that personalization, you have to figure out the right next best action, and that requires strong decision making and a strong decision engine, which is what will be demoing later today. So how is personalization, and loyalty programs as a whole, changing in the marketplace, right? You've got evolving consumer expectations where they demand that you recognize that you know them. I always like to tell the example, there's one department store I won't name that I have shopped at now for probably 30+ years. I buy men's clothes, some home goods, nothing in baby, nothing in women's. To this day, and I'm part of a loyalty program, they have a full profile. They even ask me in their profile, "What do you like? What types of categories do you typically buy?" They went so far as the ask that, which a lot of times people don't. I get, every day, an email from this department store. And every day it is about "Get your New Year's Eve dress." It is all for women, all the time, never changes. "Get this season's best high heel shoes." If I bought from the women's category, then okay. That's a little bit to be expected. Maybe I'm buying for somebody else, or for myself. But I haven't. And after all these years, all the data, countless, countless order history data that they have of things that I have bought, nothing in there once has been from the women's category. But yet I have yet to receive a single email, or push notification, or text, I'm even signed up for their text, the text, all women, all women's all the time. Because we know for department stores, retail stores, that has always historically been their primary consumer who they speak to. And somebody in marketing has decided they're just going to speak to women no matter what, because that's where we think the money is. Which is true in retail. But think how much more you would get if you took my order history, you took what you knew about me and you actually gave me something personalized. You know what brands I buy, shoes or other clothing. And if you just offered one thing once in a while you would get my average order value up, you would get my lifetime value up, with that small little gesture. It's not creepy, right? I've given you some recommendations based on your past purchase history, and now I'm letting you know I know you. I have spent thousands of dollars at this place over the years. And still I get, "Find your best New Year's Eve dress." So, that is an example. Maybe I'm dumb for just continuing to go back to them, but they have brands that I like, and I go back despite the fact that they don't try to reach out. But I would spend a lot more if they made it easier. And that's part of the point. So that's involving consumer expectations. The next one. Now before generative AI and ChatGPT, we've had a steady advancement of AI and ML, machine learning, that really allow us to have better and better decision making capabilities at scale. Because prior we used to have to create, and many of you probably have, and in systems like Pega in the past, have created really elaborate manual decision trees. And they're still a place for them, they don't go away. But if I buttress that with machine learning, that then is able to take those decision trees and are able to really scale the outputs, and scale how you target segments and individuals. Notice I didn't say just individuals, but smart segments and individuals, that I'm going to have better results, and it's going to target messages in new ways. There's an increased need to reduce churn because buyers will go to another brand very easily. If you are not providing something of value, you are not engaging in a certain way, you are not letting them know, "I do acknowledge and recognize the money and the time that you have spent with me and the trust you have put, quite frankly, in my brand." If you are not acknowledging that, then there's no reason for them not to go somewhere else. And so being able, the barrier to churn and to change brands is so low, you've got to constantly engage and provide personal experiences so that you can keep them coming to more. And you have to refill that trust well, right? It doesn't stay full. You've got to continually feed that over time. There are evolving regulation and privacy standards. Everybody's sort of a little afraid sometimes of what to do with data, and PI, and how do we do GDPR, and CCPA, of lots and lots of conversations about those. But what it really boils down to in part is that consumers are going by law, and also by trait, need and want to have control of their own data. So you have to have programs that give them control of their data and the data that you have about them, both to be compliant but also, again, to build trust. Because if I know I can go and I can see anything that you know about me, and that transparency is there, then that builds another level of trust. And when I have control of that information as a consumer, that further builds trust. And the fact is, all of this data that we've seen so far, it's going to be that very small segments, small percentage of your consumers, who actually are very active at trying to control what data you have about them, right? If anything, they give you more data. 'Cause if you provide anything of perceived value, the simplest example being a coupon or a discount, and loyalty programs are not just earned and burn discounts. It's not a race to the bottom. But even giving that, psychology and the all the studies show people will give you more data. So a lot of times I tell clients, "You want more data on your consumers? A, you just have to ask. B, you need to treat it carefully and let them know that you will treat that data with respect, and that they can trust that you will treat that data correctly. And you have to C, give something of value." You have to then, what is it that you're giving of perceived value? The value can be as simple as like, if you tell me, unlike this retailer who asked me what categories I'm interested in but doesn't seem to send me emails on them. But if it could be as simple as, "Tell me what you're interested in, and I'll tailor messaging just on that alone." And then of course you're gonna be adding order history and anything else you start to learn about that individual, and then segments, et cetera. But you've got to be able to not only make sure that you are compliant, but that you are also enriching your own data and earning that trust. And then finally we have a proliferation of martech, right? Marketing technology that is now available. Lots of big platform players, lots of small niche players. Is a very fragmented overall system. There are pieces, you know, solutions for about everything. But it's starting to give more and more power to brands to control how they engage across their marketing stack, and how they deliver personalized messages, and really drive loyalty programs as a result. We know that, from what we survey and work with partners with our clients, 95% of companies that have loyalty programs say that those in the loyalty program spend more. 60%, though, say that their loyalty customers typically spend two to three times more than non-loyalty. And why is that, right? It seems like all that seems simplified. And it is slightly, but it is also powerful because the loyalty program is not just the 1990s, and a date myself, coffee shop punch card, right? It's not just giving more and more discounts each time because I'm raced to the bottom and I'm just gonna give up margin as a result, and so it becomes costly. But now I'm actually engaging. I'm bringing the brand, I'm being top of mind. And I'm giving something, ideally, of value. 70%, roughly, of executives are really investing in loyalty programs. I have had so many conversations about how should we think about loyalty. And of course everybody, when they come to consultants like us, they go, "What's everybody else doing? What are my peers doing?" Like everybody, it's the first thing. Tell me what good looks like. Tell me what other people are doing. And that's a fair question. And for some people in some cases, they also need to accept that they need to be the first mover. They need to do something for the first time. But we all like, as humans, and of course to make our business case up to our executives, know that hey, well I've got a case study to point to where this actually had results. But the money is being put into loyalty programs. I would say however, unfortunately, all of these conversations that I'm being asked to for loyalty programs, I do not see people immediately also focus on how they're going to actually personalize those programs. And so we still have a mentality that's out there that a program, I think we've been too conditioned, maybe by the airlines or our hotel programs, where we just think of status, and level, and points, and free nights as loyalty. Loyalty is engagement throughout the lifecycle. A program is a way to codify what you are giving in return for that loyalty. How you are engaging, how you are providing more personalized value. And how you are rewarding, and it's not always monetary. When you embed loyalty into customer experience across the board, throughout the journey, you really can find, and it's amazing, every time I've gone through this exercise, and you find those moments to do the proverbial surprise and delight, that often cost little. So, sounds cheesy, but think about the simple things of a hotel giving you a handwritten card recognizing your birthday happens to be during the time that you're staying in the hotel. That doesn't cost really anything. Very, very little. Piece of paper and somebody's time. And somebody might be like, "Yeah, I don't care, whatever." But you do. Psychologically, you all do. We all like to be acknowledge that hey, oh you knew it was my birthday. 'Cause yeah, it's in my profile, and I'm here. And so acknowledging that, and saying thank you for staying with us and spending your birthday, that costs nothing. But that builds loyalty, sometimes much more than any discount you can provide. And it differentiates you, of course, from your competitors who aren't doing these surprise and delight moments. So the birthday card, the anniversary card, those are really easy, really obvious ones. But you would be amazed how many things you can find across an entire journey when you really think of like, how is somebody engaging with my brand at this moment? What is something small that I could do that could be valuable, that honestly doesn't cost much or anything at all? Those will stand out, because that's how you start to differentiate, and it doesn't become just a race to the bottom on earn and burn points and redemption. So everybody still thinks of loyalty, or not everybody, but a vast majority of people still think of loyalty in these earn and burn models, and that's just not how they are anymore. So, the concept of loyalty has evolved on that point, right? We talked about open data, starting there in the upper right. This is people need control over their own data. They need to know that you are treating their data correctly. And they need to know that there is value in providing you data. That is both for compliance reasons, but more importantly for trust. There are shifting customer perceptions. The reason you're seeing so much investment in the last number of years, and especially in the last three, really kind of started during COVID, but not because of COVID, this is one of those few things that was really because of COVID, was that customers when they were polled and as they were, you know, all the different surveys, all the different feedback mechanisms, we were finding that customers were really saying, "I think loyalty programs are really not for the customer, they're really for the business." Now we're all adults. We know you're trying to get me to spend more money with you. It's not a secret. But the way you do it can be either transactional and very mercenary, or it can be as a relationship of trust of like, "Hey, I think you might actually like this." "Hey, did you know that we have this partnership with so and so and they do these experiences. They offer these types of services, these products that are of value to you." Just connecting customers sometimes to other products and services is enough to give them value. So there was a huge shift in perception of, and I again, I think part of this is the travel agency. As somebody who travels a lot, as many of you probably travel a lot, there's been so much shrinkflation and inflation in travel agency, like your travel industry. My points on my airline don't seem to buy anything while all of these airfares are so super expensive. But I have noticed that my airline is trying to do smaller surprise and delight moments. As somebody who does loyalty, I'm like, okay. I know the workshop that you sat in and figured this out, and I appreciate that it's happening. But you know, I also would like free flights. So, you have to balance that. 'Cause the truth is people do want their discounts. There is a gamification that can happen. There is value that is very obvious there. You just have to be careful not to go too far and make that the only mechanism. Loyalty is a wellness enabler, right? This is kind of, think of Oprah's "Live Your Best Life." So this is a little bit, how certain brands, of course, that are already about wellness really tie into this easily, right? If you're a supplement company, a health company, a gym, this is very easy. But even for other brands. So let's go back to the retailer and clothes. You're like, okay, I don't think of clothes as wellness, but clothes, as a simple example, you can tie into, how do I help you as a brand live your best life? And you don't phrase it that way, of course. But if you are actively thinking about how do I improve the wellness and wellbeing of my customers, that goes a long way. More than you think, even for brands that you wouldn't automatically associate with wellness. Exclusivity. We're gonna talk a difference between, sort of exclusivity and elitism. You don't want to be elite in that you're only rewarding your most loyal customers, but that you are presenting an option to feel that there are exclusive benefits of being part of a loyalty program, right? Don't forget that. So you see this a lot with people who are dabbling with memberships right now, trying to copy a little bit or parts of the Amazon Prime model, where, hey, if you pay me, you know, Walmart+ you pay me 14 bucks a month, I give you free shipping, I give you the ability to pick up things in store within two hours. There are perks. There are exclusive perks, in that case of a paid membership model. The same is true for an unpaid loyalty program. The experience economy. How can your brand be part of a broader ecosystem that can provide experiences, can connect your consumers to other goods and services, that are not in direct competition but are complimentary to your brand. And you have to have transparency for instant rewards and information. This is where data is super important. You've got to have real-time ability to update. I've been very impressed since I've... Since I complained about my airline. I'll say I'm impressed about my airline, that before like you take a flight, and you wouldn't get your points 24, 48 hours, it was pretty reasonable. But sometimes some people are like, want those points and they wanna try to use them. And I have noticed that, I'm in the taxi coming from the airport, and my app has been updated, right? That data is now updated in near real time. I've barely left the airport. That was never the case. Your program has to operate similarly, and then it has to be updated. Think of the Starbucks model. You're earning stars when you've ordered something. If those stars didn't show up immediately the way that they do, and your friend's like, "Hey, can I get a..." And you're like, okay, well now I have enough to actually redeem for that. I have to be able, with those stars that I just earned, and you can, pay for this next drink and redeem, right? So your data has to be real time enough and connected enough and personal enough for that real-time information and redemption. The impact then is you meet expectations, you deliver personalization, you draw upon an ecosystem of partnerships and alliances. So really, how are you able to bring more? What's the one plus one equals three for your brand? And, at the end, deliver exceptional experiences. Successful loyalty programs, they've gotta be rooted, as I said, in trust. They also have to be easy, right? How many of you know loyalty programs, they're just, they're so complicated, right? The credit cards, I refuse to get a credit card that says you get 5% off of this category and 3% off of this one, and on Mondays you get 4% off of that. No thank you, right? I will take a credit card that is 2% off of everything and easy, as well as a higher end card that I have to pay a membership fee but I know I make my money back. That's me personally, but it's also a lot of consumers. So unless you're a credit card company, for your own brand, you really want to make this easy to understand. It cannot be complicated to understand your loyalty program. It needs to be value driven. What are you giving in value? And purposeful. So, intentional and purposeful. Not just building a bank and having some status and just kind of sitting there and waiting to use it. So as a result, you've got a mix of ingredients to choose from. And for the longest time people focus in that first column of rewards, what we call earn and burn. It was give you points, get a discount. The more you spend, the more you save. And what happens when we would evaluate and look at it from a financial standpoint, you just start giving up margin. You just start racing to the bottom and trying to buy your loyal customers instead of building trust with them and getting them to come to you because you've got something of value to provide. So earn and burn still plays an important part. It still needs to be there. Points, some sort of discounts, some acknowledgement, absolutely. It's also one of the easiest ways to introduce gamification so that people are coming back for more. So it has a role to play. Just don't over index on it and don't rely on it too much. Status, right? The airlines, the hotels, anywhere else. How do I reach different status? By spending more with you, by trusting your brand more, you reward me with status. And that status is giving me then, particular perks. And that applies outside of the hospitality industry, right? There are many programs where that very much can apply and is important. Membership. Not always there. We see more and more membership. Didn't really work for Bed, Bath and Beyond, wasn't the savior they thought it would be. But it's working kind of well for Walmart, has worked really well for Amazon for a while. But why does it work? Because I'm getting perks. With any type pf membership, same thing with premium credit cards, the consumer has to be able to do easy calculation that the perks that I will receive will outpace, will pay for the membership that I'm about to pay. So, membership can be an important aspect. It's one of these ingredients, I would say of the five here, that may not exist at all. The last two are two that people kind of forget and don't address. And that's community and its purpose. 'Cause they go, "Well, my brand's not that kind of brand." Yeah, your brand is. Your brand has the ability to have a loyal following of consumers, and that represents some sort of community. You have to define it if it's not immediately obvious what that community is. If you're in health and wellness, a health and wellness community is obvious. If you sell dirt bikes and off-road vehicles, that's a community. But there are ways that you can create a sense of community so that people identify and say, "Oh yeah. This is the brand for us." Think of the REI model and the co-op, Patagonia. Those are good examples where it's very community based. People shop with those brands because they trust them, but also because it's a sense of community and it's a sense of, yeah, we're similar. So what does that community mean for you? You don't have to call it a community. There's nothing in REI or Patagonia that calls themselves a community. But you have to define it as part of your program and as part of your marketing to say, this is the community that we're creating. This is why people want to come here and be with like-minded individuals, and feel like what you're doing is you're feeding that psychological need to feel like you're something bigger than yourself. Now, it doesn't have to be super lofty. It doesn't have to be, you know, near religious. But what that means is, what is bigger than them as a community for your particular brand. And purpose. People go, everybody's kind of really jumping on the purpose bandwagon and going overboard. Now, if you root the brand and the loyalty program in a purpose, sometimes that purpose is like a Tom Shoes where sure, we donate a pair of shoes for every pair that you buy. Or Bombas that does the same thing with socks. There are many others that are associated with different charities of different kind. It doesn't always have to be about a charity, but there should be some kind of purpose. One of the big examples, do I have anybody from P&G in here? Just double checking. Okay, Dawn dish soap, right? Remember Dawn dish soap? If you're old enough, remember Exxon Valdez oil spill? And Dawn was the dish soap that cleaned the animals, right? Cleaned the oil off the animals. And so since that time, they've had a program that in purpose that is about saving wildlife. Now, Dawn dish soap cleans oil off of animals because it is partly a petroleum product, but it was able to find a purpose, and it was able to say, look. We all remember the little yellow ducky, right? The little yellow chick that was cleaned. And it worked and it does work. And they did a lot of great work. Started, I think, with Exxon. I think that was the first one. There was another oil spill a couple years later after that. But they've been able to establish that purpose with that soap. So, think of these as ingredients. It's not a spectrum that you have to go across all, and not all the ingredients are always needed. It's about finding the right amounts for your particular program. So, what does it take to deliver effective personalized loyalty programs here at scale? Too far. So, six common characteristics. They're simple, they're accessible, they're easy to sign up for, they're easy to use, they're available to all of your customers. There's variety, right? It isn't just, you're constantly just earning points and a discount, but you've got variety in your engaging in different ways and through different means. They are inspiring. That's the surprise and delight moments. So it's not inspiring like, you know, like an inspiring book. But it is inspiring because, "Oh, yeah, that was nice. They kind of recognized me. I got a little something as well in return." Memorable. what are you doing relative to your competition that makes you memorable in these programs? Loyalty programs are the great place to be memorable, in addition to your customer service, your retail experience, your customer service experience. But how are you memorable? Loyalty programs are a great avenue to do that. And by being personalized, that's how you can be especially memorable compared to peers. And personal, of course. So, driving that personalized capability that, I know you, I have enough data, I'm using the data correctly, and I'm giving you something that is of value to you. Common pitfalls that we see with loyalty programs. One, segmentation. And what this is referring to is that you only offer loyalty to a certain segmentation or a certain subset of your customer base, right? You've kind of made it. That's not the kind of exclusivity you're looking for when you're doing loyalty. You need to make sure that you're reaching across your customer base and that it is available to all. We see some people try to say, "I'm just gonna go after these people that I think have the highest value of lifting their lifetime value." And yes, you need to have that strategy and know who that persona group is and go after them. But you shouldn't create a loyalty program that is just for them, because there's still plenty of revenue to be had on either side of that, sort of darling persona. Elitism. This is different than the exclusivity one. This is, don't only reward the most loyal customers. Give rewards and surprise and delight across all of the customers in accordance with their spend level, and with their engagement with your brand. But don't wait. Don't make people wait until they have reached a high spend threshold. A lot of times people wanna that 'cause they're like, "Oh, I'm not gonna give anything away until they've spent at least this." You've got to find moments to bring people to those levels because you have engaged them throughout. Complexity, we talked about this. People make these, like the credit cards with the 5%, 2%, 3%. There are many other programs out there where it's just complicated. Like, I don't know how to use this thing. What is the purpose of belonging to this loyalty program? Don't fall into that trap. High cost. That's the race to the bottom where you're just giving constant discounts. I've seen brands, they don't know what else to do, and they just go, "Well, let's just give 'em another discount. Let's just give 'em another coupon. Let's give them..." Like, it's desperation. Nobody wants to dance with a desperate person at the party, right? So don't just keep giving out discounts. Don't be desperate. That's what this is. 'Cause you're just gonna make the cost of your program prohibitive, and you're just giving away margin unnecessarily. A lack of control. This is control of the data, control of the program, and control of how it is executed, right? If you do not, one, have control of your own data to be able to use it, and use it to good effect. And then from the consumer side, they don't have an ability or a feeling of control of how they interact with the program, that's where we see some programs also fail. And if it's undifferentiated. Again, people who go, "Oh, I just did earn and burn. You have tiers, you get points off." That's been done. That's no longer enough to differentiate. You've got to have something else that makes you memorable against your competitors, and in general. So those are the biggest pitfalls that we see people still kind of falling to because there's a playbook that's in the back of our minds from when we were younger that we think we're kind of still going after, when the expectation has really changed. So finally, three big capabilities that are overarching, that you need to command to do loyalty and to do personalization, period, across the board. One, get control and own your data, right? A lot of people still rely on third parties to control their data. Little bit of a black box on how they do segment, and cohorts, and propensity modeling. You need to be able to own that as a brand. You can work with partners, but you have to own that data, that customer data, that transaction data ultimately yourself so that you can really get the most out of it. Decisioning, which is what we're gonna talk about and show a demo here in a little bit. You've gotta have the ability to really do AI and ML-driven smart decisioning so that you can figure out the next best action. That's as simple as it is. How, for a segment, or for an individual when it makes sense, do you decide what to offer next? So sometimes it is, "Oops, our bad. We saw you just gave a survey that you had an awful customer service experience." You send something that says there's a next best action that says immediately if someone rates us on that post call 1 to 10 survey, if they rate us lower than a five, you send this email based on where under five they did it, you send maybe this discount, you offer an apology, you send this text and you do this, right? That can be put together by a decision engine instead of the agent figuring out to do that every time. 'Cause that's not gonna happen, let's be honest. And then delivery. You've gotta have the ability to deliver all this, right? So that's where it also falls down is how do I deliver that next best action to my e-comm site, to text, to a push notification for my app, as a callback, if that's appropriate, from your customer service center. How do I make sure, through all the channels that I have, my owned media, et cetera, that I can deliver in the right channel? 'Cause that's also part of personalization is engaging the consumer in the channel they want to be engaged in, in the way they want to. And also in the time, right? Time optimization. If any of you deal with email and marketing, you know that optimizing send time is a big part of making sure that you are going to get a click through rate that is higher, because some people are gonna engage with your messages in the morning, and some in the evening, et cetera. So really, these three key capabilities. There's a lot under here, but this is the simplest way that remember, okay, am I owning my data? Do I have the right decisioning, and can I deliver it? If the answer's no to any of those, then you need to go back to your drawing board. All right, so with that, let's switch. And so how can Pega's customers use Decision Hub really to help us personalize a loyalty program? So with that, I'm gonna hand it off to my colleague Prasad.

- Thank you Steven, appreciate that. So, I'm gonna be rather quick. Thank you very much for spending the time, Steven. So effectively, as far as this goes, I think everybody's aware the ability to actually make decisions, to engage experience, and improve loyalty. But I know one of the things everybody's looking for is the demo, as opposed to this. Because we were one of the few that want to try a live demo. It's all Leslie's fault. She pushed for it. So if it goes right, it's hers, right? So, one of the key things we want to kind of highlight here is that it's AI-driven recommendations, predefined data model. The third part is very important because we built in attribution and reporting into it. Is my AI engine really driving better loyalty, or is it just that I'm getting lucky or change of circumstances, right? And speed to market, obviously. Getting quickly. So this is the first journey demo you will see. Leslie, will switch screens in a couple of minutes, but one of the things we wanted to do was encapsulate everything else that Steven spoke about in a 5 to 10 minute demo. So this is a attempt. This is Esther. The idea is Esther is a shopper, she's 40 years old, she's got three kids. She's very discerning. Does not have time for anything else. And how do you engage Esther in a loyalty program, right? You wanna switch? So, as we were thinking about this, there are three things we kind of wanted to highlight as a part of the demo. The first part, obviously, is how to make recommendations. The second part is how do we deal with third-party cookies being deprecated, right? And how do we better engage? And we will show a little part of that. And then the last piece of it is the earn and burn items, right? Like lately, even with EY, we actually get points where we get to buy things, and I've been getting those points and I end up buying a lot of junk, right? It's very, very unfortunate. So. How do you provide options to basically utilize the points or the value you have gotten from your loyalty program? Those are the three key features we kind of wanted to highlight. Sure. All right. So here what you see is we built a front end. Obviously it could be any front end. Effectively it could integrate into your local program. But this is Esther who's already a gold member. She's effectively been with the organization for a while. Can you go to the next? So one of the first things we kind of wanted to do was help identify interest. Most loyalty programs effectively don't show interests, right? So once you identify the interest, you should also have the ability to actually select the right interest. The interesting thing here is these interests are curated based on the customer profile. So you can rank interest, you can filter interests, right? So Leslie's gonna check a few. And we're done. So the next part of it is obviously you selected those interests, and Leslie you want to go to... So you would want drive offers based on that. What we try to do as a part of this offer segmentation also is not just have direct offers, but have a VIP exclusive, some mechanism for you guys to distribute the offers and be able to show things, right? One of the interesting things that you would see is, Leslie, if you would wanna highlight any of the offers you would like to highlight, is the fact that we built models behind it to effectively drive. And you have obviously the shopping cart experience, which everybody's aware of. We've also kind of tried to address the problem that Pega decisioning has, which is it cannot operate at a SKU level. So what we do is we do couponing. We do not sell direct SKUs. And then we can have a secondary model drive the SKU items that is not real-time, it's pre-ranked. Because there's no way for any model in real time to drive a million SKUs. And by the way, we asked that question of generative AI and we didn't get a good response. The content itself also can be autogenerated and customized. Yeah? You wanna go to the... You wanna just add to the cart, Leslie? So obviously as a part of all of these offers that that are being added, one of the things is you could take a number of features into account as you're trying to predict. And the key features could also include experience. Because this is not just about selling. If you notice, we are trying to reengage Esther. That's the underlying idea for Esther, right? So even if it is not highly profitable, Esther will not be a lapsed customer for us. Once she re-engages, it'll be much better. So don't buy Leslie, otherwise we'll lose the... Can you go to the home screen? So the other part of it is, if you notice right up front as you landed, it shows like a 30% discount for Esther. It's fairly universal. The reason is, right now we are unable to predict why Esther is not coming back and buying. She's lapsing. So we are trying to solve this problem from a proactive retention standpoint instead of reactively trying to win back Esther after she becomes a lapse customer. So that's the key part of it. Right on top of that, one of the interesting elements of this solution is, if you can go into the polls. So, we think that polling and gamification could be a very interesting mechanism, not only to provide points, better engage, but also to be able to collect data. The aspect here to consider... Don't sell. Aspect here to consider is the options that you see on the screen there are predetermined, they're not random. So if you think about your model that helps you make a prediction, the model has inputs. If you're missing an input, we can frame that as a question and get that input natively, first party. So no, legal issues. Somebody provided this information to us, and we think that's a wonderful mechanism to manage the third-party cookie issues that you'll continue to encounter. So obviously, Ester has done that and she's received her five points. The second scenario, and apologies folks, we only have two minutes, So we kind of trying to rush through this. The second scenario is, like Andrew, we are gonna cut down on Andrew a little bit. But the underlying idea is you'd be able to do a variety of things, manage a bunch of experiences with Andrew as well. Andrew is actually a new customer. He is got silver status. We don't really know what to do with him a lot, but we know that he likes to spend points because he doesn't have too many. You wanna go there? Yeah, just go straight through. We are not seeing on the screen, Leslie. You can close the deck, actually. Thank you. So obviously Andrew has a very, very similar setup. But the interesting thing is the redemption mechanism for Andrew, right? What we've also also done is not only the ability to sell, and this ties into the experiences and community parts of what Steven was talking about is, what can we provide to Andrew so that he has the ability to redeem points and feel better about it instead of buying cheap plastic, right? So, there are multiple options around this. The altruistic element of loyalty redemption is very, very interesting because everybody here knows that one point is about a penny or half a penny. That's where it typically trends. So here, what we have done is we've started ranking things. So you have the ability not only to provide value in terms of selling, retaining, but also redemption. That's pretty much it folks. Apologies for pushing through a little bit towards the end.

- So, we are... Oh, no, we have more time. It says 21 there.

- Yes, but questions.

- Okay. Yes. So at this point we have two microphones on either side. If folks have any questions. Somebody's gotta have a question. Wow. Do you wanna come over there?

- Yes.

- [audience Member] Creating this entire system?

- So from an accessibility standpoint, we considered colorblindness, right? But we did not consider significantly vision impaired people, right? This was supposed to be demonstration, but typically you have UI standards for it, right? Like, as you go build a production grade solution, you would have UI standards for it.

- Is there a question?

- I think somebody was saying watch your step.

- Oh, okay. So I have a question.

- Yes.

- In the brands that you have worked with, what's been one of your most challenging clients to kind of define this?

- I'll defer to Steven on that.

- The most challenging, I think... They tend to be the brands that don't think they have any community or any purpose to offer, and they think that those are buzzwords, versus really exploring what is common among my brand, my brand voice, my value proposition as a brand, and how can I create a community around that? So I've often had that conversation where we've had to really go through journeys, really also do a lot of voice of customer and get more survey data, and more sort of proof points to really prove what we had said at the beginning, which is, your marketing may be aware of and able to highlight what types of communities that you can create. And it doesn't mean you go and create an actual community, but that you understand that community and you enrich it, and you support it, so that people can feel a part of it. It doesn't mean that they have to even interact with anybody else, but if they feel, you know, just like there's a community, as I mentioned before for you know, the REI, Patagonia brands doesn't mean that you're actually interacting with other customers, but you definitely feel a part of that community because of the way their programs, the way their marketing works.

- So, I mean I actually am a guilty of this 'cause I'm an REI shopper. And I'm also like, I will only most of the time buy close at Anthropologie. So I feel like it's almost an identity thing.

- Right, Exactly.

- Right. Like kind of creates who you are, kind of how you want to be seen.

- Yeah, And taking that extra step to really find those moments that matter in a journey where you can surprise and delight, everybody kind of discounts or step skips that step because it doesn't sound as concrete to a lot of people, but it's one of the most concrete things you can do. And I've seen over and over what people have been able to come up with and really drive, and it found like, oh wow, that actually became a great part of our win back program. That became a great part of getting people to spend just a little bit more and get the AOV up for the year, or to get one more shopping trip. And so it's always rewarding to see, when these things that everybody was skeptical about, actually are driving business and are actually measurable and attributable to the loyalty program success.

- Yeah, and I'll just... I know I'm like interjecting on his presentation here, but so the other thing that's interesting is some of the brands I'm most loyal to are the ones that stuck with me. Like when I had my kids, I wasn't buying tons of clothing from Anthropologie 'cause I was home a lot. They stuck with me as a brand, and continued to engage with me. So, I think that's kinda interesting.

- And that's the trust, right? They build trust. And said we're here when you're ready.

- Okay. Well Steven will be around. I know everybody's anxious probably, to get to the four o'clock reception, right? It's been a long day. So, thank you for hanging with us a little extra time and you'll be at the reception for a bit?

- Yep.

- Yep. So I encourage everybody to swing by and say "hi" to the EY folks. Also in the innovation hub as well. They have a pretty big, you can't miss it. There's a big E and a Y, and they're a platinum sponsor. So, thank you.

- Yeah, thank you for joining us.


Product Area: Customer Decision Hub Topic: AI and Decisioning Topic: Customer Engagement Topic: Marketing Topic: PegaWorld

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