INTERVIEW

Nearly two decades of judging loyalty awards have given Eileen McGuinness an unrivalled view of what separates great programs from merely busy ones. In this interview, Eileen explains why enrolment isn’t loyalty, which member segments are actually profitable, and why the biggest barriers to performance are usually organizational rather than technical.

CMO Council: What lessons and learnings have come out of nearly two decades of loyalty awards recognition worldwide?
EM: The biggest lesson is that the definition of loyalty excellence has continually evolved. In the early days, the emphasis was on points, discounts, miles and the mechanics of repeat purchasing. As digital channels developed, the focus broadened to customer experience, personalization, partnerships and emotional engagement. Today, the strongest programs combine these elements with measurable commercial performance.

Across the awards and benchmarking work, a few principles have remained consistent:

• Value must be tangible. Customers need a compelling reason to join, participate and stay.
• Enrollment is not loyalty. A large database or impressive membership figure can conceal substantial inactivity. The real test is whether customers return, engage, redeem, spend and remain with the brand.
• Recognition should feel personal. Strong propositions reflect individual preferences, behaviors and customer value rather than treating every member identically.
• Loyalty should reinforce the brand. It should give customers reasons to choose a company, not simply subsidize purchases that would have happened anyway.
• Operational excellence matters as much as creative thinking. A compelling proposition will underperform if rewards are difficult to understand, data is fragmented, systems do not integrate or employees cannot deliver the promised experience.

My overarching conclusion is that the industry has moved from rewarding transactions to managing relationships, and increasingly toward orchestrating customer value across an ecosystem. The next stage is not simply to make programs more sophisticated; it is to make them more relevant to customers and more accountable to the business.

CMO Council: Which are the most ardent, active, dedicated and profitable loyalty member segments?
EM: The most valuable members are not necessarily those with the highest lifetime spend, the largest points balance or the most frequent app logins. They are the members whose behaviors generate the greatest incremental, profitable value for the business.

Five segments are particularly useful to consider:

• High-value repeat purchasers: customers who buy frequently and have strong retention potential, especially where the program can increase frequency, basket size or share of category spend rather than reward existing behavior.
• Highly engaged, reward-using members: members who earn and redeem rewards, participate in relevant challenges and respond to targeted offers. Their behavior suggests that the proposition is understood and valued.
• Advocates and referral generators: customers who recommend the brand, write useful reviews, refer new customers or contribute to communities. Their value includes acquisition costs they help avoid.
• High-potential and emerging loyalists: customers whose needs, purchase trajectory or engagement suggest future potential. Timely recognition and relevant interventions can encourage higher-value behaviors.
• Premium, ecosystem and cross-category customers: members who value exclusive access, status, experiences or benefits across partner brands, particularly in travel, hospitality, financial services, telecommunications and multi-brand retail.

Profitability is the critical qualification. A high-spending customer receiving substantial discounts or expensive benefits may be less profitable than a moderately spending customer who buys incrementally, remains longer and refers others. Segmentation should therefore combine recency, frequency and monetary value with contribution margin, reward costs, incremental behavior, price sensitivity, advocacy, churn risk and future growth potential.

CMO Council: What strategic, structural, organizational and operational factors limit loyalty performance and growth?
EM: The biggest barriers are often organizational rather than conceptual. Most established businesses understand the mechanics of loyalty. Far fewer have aligned the strategy, technology, incentives and measurement required to make it perform across the enterprise.

The recurring challenges include unclear strategic purpose; fragmented ownership across marketing, CRM, digital and customer experience; competing priorities across finance, IT, retail and operations; disconnected point-of-sale, e-commerce, CRM and service systems; overly complex reward rules or excessive reliance on discounting; and measurement frameworks that report activity without proving incremental impact.

Technology and integration complexity remain significant obstacles, but they rarely operate in isolation. Organizational alignment, budget, customer engagement and the ability to demonstrate ROI are also common challenges. The answer is not always another platform or program redesign; often it is clearer ownership, a stronger customer proposition and agreement on the business outcomes loyalty is expected to influence.

CMO Council: How is loyalty program management viewed in most enterprises? Who are the outperformers and why?
EM: Loyalty management is in transition. In some organizations, it remains a specialist marketing function responsible for points, promotions, campaign execution and program administration. In more mature organizations, it has evolved into a strategic capability connecting customer insight, commercial planning, retention, data, technology and customer experience.

This distinction is reflected in how businesses measure success. Where loyalty is treated primarily as a cost center, the focus tends to be on reward expense, discount leakage, membership numbers and campaign delivery. Where it is viewed as a growth engine, the conversation shifts toward customer lifetime value, incremental revenue, retention, contribution margin and competitive differentiation.

There is no single formula for loyalty excellence, but the strongest programs show a clear understanding of the role loyalty can play in the wider business. MYER one, for example, has been recognized for program transformation and customer data and analytics, reflecting an ongoing effort to make engagement more customer-led and commercially relevant. Tesco Clubcard Challenges demonstrates how first-party data and personalized challenges can encourage behavior in ways that are relevant to individual shoppers. Other programs illustrate different strengths: FNB eBucks embeds loyalty in the core banking relationship; GHA DISCOVERY extends value through a multi-brand hotel ecosystem; and Sephora Beauty Insider connects rewards with product discovery, community and experiences.

These examples highlight an important point: outperformers do not necessarily have the most complicated programs or the most generous rewards. They are clear about what they want loyalty to achieve and design the proposition, customer experience and supporting technology around that ambition. Common characteristics include executive sponsorship, a genuine understanding of customers, cross-functional integration, a focus on incremental value and a willingness to test and evolve continuously.

Awards and benchmarking offer a valuable view of innovation and execution excellence, although an award alone does not prove comparative commercial outperformance. Ultimately, the distinction is between organizations that simply operate a loyalty program and those that use loyalty as a strategic capability to connect customer value with business value.

CMO Council: Where and how should companies improve loyalty planning, strategy, cross-functional integration and measurement?
EM: Start by changing the planning question from “What should our loyalty program offer?” to “What customer and business outcomes are we trying to change, and how will loyalty help us achieve them?”

That means defining a small number of priorities, such as repeat purchase, churn reduction, share of wallet, acquisition, margin, referrals or stronger relationships and building a joint customer and commercial strategy around them. It also means establishing enterprise-wide ownership, with an executive sponsor, an accountable loyalty leader and shared KPIs across marketing, finance, data, IT, digital, merchandising, operations and customer service.

Planning should cover the full customer lifecycle, from enrollment and first value through activation, repeat engagement, retention, reactivation and advocacy. Continuous test-and-learn measurement, using cohorts, holdout groups or controlled experiments where possible, helps establish which interventions actually change behavior. Technology should support the strategy rather than dictate it: integrated systems and flexible platforms help execution, but cannot resolve unclear ownership or a weak proposition.

CMO Council: What KPIs should be used to measure the business value and success of loyalty programs?
EM: Measuring the true value of a loyalty program remains a challenge for many businesses. Through our awards and benchmarking work, we have seen increasingly sophisticated programs, but demonstrating their direct contribution to business performance remains difficult. In some cases, measurement frameworks are not sufficiently developed; in others, commercial results are confidential or under embargo, limiting what can be shared publicly.

The key distinction is between program performance and business impact. Membership numbers, app downloads, campaign engagement and points redemption show how a program is operating, but do not necessarily prove that it is changing behavior or generating incremental value.

A meaningful framework connects engagement to behavior change and then to business value. It should include retention, repeat purchase, frequency, share of wallet and customer lifetime value, alongside incremental revenue, contribution margin, profitability and return on investment. Customer measures such as satisfaction, advocacy and perceived value also matter, particularly where the aim is to strengthen a relationship over time.

Incrementality is critical. Members who join or redeem may already be more engaged or valuable than other customers, so their higher spend does not automatically prove that loyalty caused the difference. Businesses should use controlled tests or appropriate comparison groups where possible, and assess additional value after reward, technology, marketing and operating costs. The question is not simply whether a program is being used, but whether it makes a demonstrable difference to customers, their relationship with the brand and business performance. Closing that measurement gap remains one of the industry’s most important challenges.

CMO Council: Where are you seeing the most innovation and execution excellence in loyalty program operation?
EM: One of the most exciting parts of reviewing loyalty award entries is seeing how brands are rethinking what a program can do. The strongest examples are not simply new reward mechanics or more sophisticated apps; they weave loyalty into the wider customer experience, using data, technology, partnerships and customer understanding to create more relevant relationships.

In everyday retail, personalization and digital convenience continue to develop. Tesco Clubcard Challenges, winner of Best Global Loyalty Launch or Initiative at the 2026 International Loyalty Awards, used personalized challenges to encourage customers to engage with products they already buy. Marks & Spencer’s transformed Sparks proposition has put greater emphasis on personalized monetary rewards and a digital rewards wallet, reflecting the importance of making value clear and easy to use.

Innovation is also extending beyond traditional retail. Virgin Active Rewards connects rewards with members’ fitness and wellness goals, while Insomnia Treats combines personalized rewards and digital convenience with community and initiatives such as incentives for using a reusable cup. These examples show that loyalty can encourage behaviors that benefit both the customer and the business, extending the relationship beyond a single transaction.

Across these cases, personalization is becoming more dynamic, partnerships are expanding the value available beyond one brand, and gamification is creating new ways to influence behavior. The challenge is execution: technology does not create a better experience by itself. The strongest programs start with a clear customer need and business objective, then use technology to deliver something genuinely useful and commercially sustainable.

CMO Council: How have digital marketing transformation, global messaging channels, social media and mobile dependency impacted loyalty?
EM: Digital transformation has expanded loyalty from a membership card, points balance and periodic communication into a more connected experience spanning customer data, mobile access, rewards, service and interactions across channels. Looking across award entries over the years, we have seen innovation in predictive analytics, gamification, mobile payments and digital wallets, alongside growing interest in sustainability and B2B loyalty.

Mobile and messaging give brands more immediate ways to recognize customers, explain benefits and deliver timely offers. Social channels create opportunities for advocacy, referrals and community participation. Connected retail raises expectations that preferences, rewards and recognition will work consistently across stores, websites, apps and customer service. But more contact does not necessarily mean more loyalty: relevance, convenience and trust matter more than message volume.

The 2026 European Loyalty Awards winners illustrate different aspects of this shift. Kaufland Card XTRA responded to pressure on household budgets with a timely fuel-voucher campaign activated through its app, demonstrating how established digital mechanics can help a brand react quickly to changing customer needs. Piraeus Bank’s Yellow program shows the enduring value of a straightforward reward currency and a broad partner network. TUI Smiles Rewards Club extends engagement into the period between booking and traveling, recognizing that the customer journey includes moments well beyond the transaction itself.

The lesson is that digital transformation should remove friction, make interactions more relevant and connect experiences across channels. Technology should improve the relationship, not simply add another digital touchpoint.

CMO Council: How is the loyalty function becoming more essential through hyper-personalization, chat commerce, connected retail and AI?
EM: Loyalty is becoming more strategically important as businesses respond to cautious spending, competitive pressure and greater scrutiny of marketing investment. The outlook is positive, but not every program will succeed: customers expect practical, relevant value, while businesses need evidence that loyalty creates incremental contribution and lasting relationships.
The loyalty function is increasingly where customer understanding is translated into action. Historically, teams often managed rewards, membership communications and promotional calendars. Today, the function can influence acquisition, retention, pricing and promotions, data strategy, personalization, customer experience and the economics of long-term relationships.

Hyper-personalization, chat commerce, connected retail and AI are accelerating this shift. AI and analytics can help brands anticipate needs, identify churn risks and tailor rewards and communications, while connected systems enable more consistent recognition across stores, e-commerce, apps and customer service. Conversational tools can help customers discover benefits, access rewards and resolve queries. The real opportunity is not to generate more messages or automate more tasks, but to make better decisions about which customers to engage, with what proposition, at what moment and at what cost.

This requires reliable data, appropriate consent, strong governance and human judgment. Technology makes more actions possible; loyalty professionals must decide which are valuable, appropriate and trustworthy. Ultimately, these capabilities should help teams improve retention, encourage valuable behavior, make rewards more accessible and strengthen customer relationships while demonstrating genuine incremental commercial value.

The real measure of loyalty excellence is not how many members a company has, how many points it issues or how advanced its technology looks. It is how effectively it turns customer recognition into lasting relationships, and those relationships into profitable, sustainable growth.

Eileen McGuinness is a commercial and entrepreneurial business leader with over 30 years’ experience spanning customer strategy, insights-driven marketing, business development and commercial growth across multiple sectors, including retail, travel and financial services. Her expertise encompasses business transformation, market development and strategic partnerships, with a track record of developing customer-led strategies that deliver measurable business impact.

As Co-Founder& CEO of the International Loyalty Awards, European Loyalty Awards and Irish Loyalty Awards, Eileen has built platforms that celebrate excellence and innovation across the loyalty industry, connecting brands, practitioners and thought leaders across markets.

Through her work with these programmes, she has developed a distinctive global perspective on loyalty, informed by exposure to some of the world’s largest and most innovative loyalty programmes. Passionate about helping organisations unlock the full potential of customer loyalty, Eileen combines industry insight, strategic thinking and commercial expertise to recognise excellence, advise businesses and champion customer-led growth that delivers sustainable results and long-term value.