The next loyalty challenge

Q&A with the CEO of LoyaltyOne

The next <strong>loyalty challenge</strong>

Bryan Pearson is no stranger to the loyalty business. The CEO of LoyaltyOne has spent the last 25 years in this industry, and has now decided to embark on his next loyalty challenge – by becoming the new CEO of BrandLoyalty. Hearts & Wallets caught up with Bryan to find out why his credentials make him the ideal candidate for the job.

How did you first get into the loyalty sector?
On leaving university, I started off in packaged goods marketing for the Quaker Oats company. I chose marketing mainly because I loved the aspect of understanding consumer behaviour and its central role in crafting the strategy of a business. However, having trained as a scientist, I started to find it frustrating. It was very qualitative – more about how people ‘felt’ about advertising and marketing activities than about any facts to support what would or wouldn’t work. There was no scientific methodology to it.

My next step was in direct marketing, which gave me more of the measurability that I was craving. Here, I was able to measure the success of different activities. Then loyalty came to me on a hop, skip and a jump as a more satisfying combination of science and marketing. I landed in the loyalty space where by giving customers a loyalty card, being able to track their behaviour and identify how they shopped over time, you suddenly got an element of measurability that came alive in the mix. Therefore it was a very natural transition for me to move into this industry.

How was the loyalty business developed since you've been in it?
I feel like a dinosaur when I talk about how far it’s moved! The loyalty world that I entered 25 years ago was viewed as a kind of continuously repeated mass promotion. There was no internet, and we were in a very traditional media environment. But I still found it magic to combine data science with database marketing, and to overlay that with a card- or stamp-based loyalty structure. It was clear even then that loyalty could be adapted to create a much more meaningful tool for retailers. 

The retail industry has changed quite a lot since then, but not as dramatically as the tools that are available to us as loyalty practitioners. Not so long ago, when we ran a data query and had a terabyte of data to work with, the lights would dim and smoke would start coming out of computers – you needed really big hardware to deal with those kinds of data files. Now people talk about petabytes! The quantity of data that can be crunched and the ways of creating tracking mechanisms have opened up countless possibilities. The avenues through which you can reach out to consumers – such as the mobile phone (which is basically a marketing device that everyone carries with them), or location-based marketing – have transformed the industry. There is now a marriage between a relatively old-school traditional habitat and a dynamic sphere that’s been at warp speed for the past 15 years. The constantly changing crossroads between the two is a fascinating space to work in.


Despite these possibilities, I still receive old-school, impersonal leaflets through the door every week. That’s a lost opportunity, because these retailers have so much information about me – through loyalty cards and suchlike – that they’re not using. There is a personalisation journey that retailers will have to take, and I believe loyalty is part of that. It’s partly theatre, partly excitement, partly factual information exchange and totally how you create real value in terms of what each consumer prefers. Not everybody is interested in discounts or stamps or points or value propositions, but through mining that information there is a wealth of opportunity to connect the dots so that consumers can really experience something different and personally worthwhile.

How have consumers changed?
People have far more information at their fingertips than they had 20 or even 10 years ago. You can’t discount the impact of online shopping. Players like Amazon are commanding and transforming consumer expectations. A few days ago I was walking through the airport and saw a lady with a smartphone in front of the sunglasses aisle. She was showrooming: checking if the price in Duty-Free was actually a good one or not. This instant access to knowledge about products and services, facilitated by technologies and the organisations that use them, has created a challenge for certain sectors.

For example, department stores really have suffered because they are a little bit of a no man’s land. They have a variety of goods and no real depth in the assortment of anything, and yet their customers can access any designer or product. I can even connect to a little cottage industry person making products or services if that’s what I’m looking for.

I still believe in the foundations of the retail experience, but I think the key word is experience. Retailers today are tasked with curating an experience for the consumer, so they have to be more thoughtful about what they do. They have to create a lot more theatre and a stronger brand message around what they stand for. Or they need to be at the other end of the extreme, which is cheap and cheerful. Even that is an experience.

The same kind of thing is starting to happen in food retail. It’s lagged behind other sectors, but the winds of change have definitely reached it. If you want to buy certain types of foods, you now have the opportunity to reach out and connect directly to farmers, or to get organics straight from small purveyors. This behaviour is enabled by technology. However, the larger players can also leverage the same technology to curate an experience that mimics the desired experience. Food is so fundamental to who we are and what we do as human beings, that there is something very instinctive about going and selecting it, to being inspired and having that wholesome experience. Therefore it is essentially different to picking a dress online and saying “I want that in that size” – but we will see if my theory is proved right over time!

People have far more information at their fingertips than they had 20 or even 10 years ago Bryan Pearson, CEO of Loyalty One

Since LoyaltyOne acquired BrandLoyalty in 2014, what have been your biggest learnings?
Our different business models made it a very interesting connection. As the head of LoyaltyOne, I had devoted my career to building loyalty card programmes to get long-term loyalty from customers. My counterpart Robert van der Wallen had steered his career in the opposite direction, feeling that loyalty cards didn’t have the immediacy or excitement of stamp-based programmes. Therefore the first learning was that each type of programme has its own implicit benefits. In fact, there is a huge opportunity to create a layering effect of running both types of programmes, which can be highly complementary. 

The second eye-opener for me was how effective short-term loyalty programmes are for retailers when they are used correctly, especially when they are tailored to address specific strategies for the retailer. The learning curve of understanding and appreciating that genre of loyalty is part of the excitement for me.

What has been your biggest surprise since joining BrandLoyalty?
By far the quality of the people and the work that’s actually happening. The genuine passion my new colleagues have to create great products that are going to truly excite people is outstanding. The diversity of thinking around how we focus on different segments of consumers makes coming to work a voyage of discovery.

Any cultural differences which you have had to adjust to?
My mother is French and so I spent a lot of time growing up in Europe, so it’s not a huge cultural shock. In fact, I quite enjoy the feeling of being in Europe and having the opportunity to work and travel here. Of course I’ve sometimes been surprised by the curious sayings and how business is conducted in the Netherlands – that has taken some adjustment. But since I’m a person who is curious and loves to learn, it all adds to the adventure.

You are still the CEO and President of LoyaltyOne - how are you splitting your time?
My commitment is to be in the Netherlands two weeks a month. My schedule has been blocked for the next six months to a year, so that there is a very clear view of when I will be traveling to the Netherlands, or available for travel on BrandLoyalty business. But I don’t think it’s so much about dividing time as about providing continuity. What we do at LoyaltyOne is not that different from what needs to happen at BrandLoyalty. Sure, there are differences in the segments that we are in and what we do, but the basis of what we do for clients and for consumers in terms of bringing enjoyment, entertainment, excitement and positive results is the same. And so even if I’m in Canada working on something else, I’m not very far away – we run a global business and therefore you need to be in touch globally.

My working day is a long one, but if you’re passionate about what you’re doing and you love what you do, the hours just fly by.


What is the future of Loyalty from your point of view?
You can come at the question in two ways. We often talk about ‘Big L’ Loyalty and ‘small l’ loyalty. ‘Small l’ loyalty is about the things you do within loyalty programmes to build richer relationships with your customers. ‘Big L’ Loyalty is really about consumer loyalty in itself. Will consumers become more disloyal? Or is loyalty a human condition that is so ingrained in who we are as people that it’s the greatest resource you could tap into from a business standpoint? I strongly believe that there is nothing more powerful or strong than loyalty. It creates incredible elasticity in your ability to have a mutually beneficial relationship with your customer. As long as you respect it and know how to use it properly, effective ‘small l’ loyalty will be the natural result. Although the marketing ecosystem has transformed dramatically in the last 10 years, we still find that well-constructed loyalty programmes create positive relationships and behavioural change. The target consumer still experiences a high degree of relevance from these programmes.

The challenge for programmatic loyalty in today’s and tomorrow’s disruprive environments is to build on this relevance by taking advantage of the tools and techniques that are out there. So I do see a significant influence in how we connect to customers, and in how we leverage technology, to enable the growth of those relationships and the relevance of our communications. 

I also see significant opportunities in using artificial intelligence, machine learning and all the analytic frameworks to deepen the understanding we have of consumers so we can execute and deliver these benefits.

And how does BrandLoyalty fit into this?
BrandLoyalty is perfectly positioned. We are already a long way down the road of using digital technologies and consumercentric strategies to fully enhance the results of our programmes.

From a data and analytical standpoint, there is no such thing as artificial intelligence! We are also keenly focused on insights and data that enable us to gain a deeper understanding of who the consumer is and what their hopes and desires will be. Our programmes can therefore be tailored to address performance strategies and concerns that retailers have specifically about their own business.

Are you heading towards more of a 52-week solution, rather than short- and long-term promotions?
One of the theories Robert and I had was that the ability to bring these two methodologies together would create an optimal environment to engage the consumer. In the instances where we have engaged consumers with continuous loyalty propositions and we have been able to layer in short-term loyalty, we have been able to not only to understand the dynamics better, but have also seen the extra value that we inherently felt existed. The other issues is that we are all in an ever-more competitive and disruptive environment, containing online and offline channels, different formats, price-oriented vs. oriented players, fickle consumers, and constant change. To successfully engage with their customers, retailers will really have to raise their game. If you don’t have a multi-layered approach, you’re going to miss out on opportunities to fully capture the sales potential for your business. You need to understand your customers on a different level and to engage them with things that are genuinely of interest to them. For some people it’s about price, for some it’s about the collectables, for others it’s about the value-added pieces that they can collect, or the experiences they enjoy. The key is to create an integrated calendar that gives the consumer a continuous feeling of satisfaction highlighted by an element of surprise and delight. That’s going to take far more than a clever pricing and merchandising strategy. It’s where all aspects of loyalty come together to keep your customers happy. And spending money. 

Hearts & Wallets is the official magazine of BrandLoyalty. It is a magazine for people working at the highest levels of the food retail industry. The goal of Hearts & Wallets is to come up with real insights on - and answers to - current issues, while offering its own individual interpretation as food for thought.

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