You Say You Want a Revolution

How the Beatles can help you reimagine customer loyalty

By Rick Ferguson

On 21 September, the best minds in loyalty will gather at the Hyatt Regency London Blackfriars for Loyalty Summit London, an intimate one-day conference centered on the theme of “Loyalty Reimagined.” In advance of the event, Loyalty Summit VP of Marketing Rick Ferguson will be queuing up the discussion with a series of articles on the reimagination of loyalty marketing.

I’ve been a Beatlemaniac since I was ten years old. Outside of Disney show tunes, the Beatles were the first music I ever listened to and loved. Today, that love persists unabated. I have “Yellow Submarine” themed artwork hanging on my wall. I own a Beatles vintage “Help” lava lamp that would burn down our house if I forgot to turn it off. I’ve watched the “Get Back” documentary three times, and I could have watched another eight hours of the lads hanging out in the studio drinking white wine and smoking cigarettes. The music of those four precocious Scousers has formed the soundtrack for this Gen-X kid’s life.

One of the many elements that made the Beatles great was the distinctive character of their four separate personalities. John the Rebel, Paul the Showman, George the Seeker, and Ringo the Innocent, like four signs of the Zodiac we can all use to define our own personalities. But the core of the Beatles’ success lay in the yin-and-yang, opposite magnetic poles of John and Paul: The Revolutionary versus the Evolutionary.

Revolution versus evolution

What do the Beatles have to do with loyalty marketing? I’m getting to that. When the Beatles formed in 1960, Pop music was in a rut. The rock n’ roll revolution of the 1950s had flamed out. Elvis had just come back from the Army. Chuck Berry, Little Richard, Jerry Lee Lewis, and the other revolutionaries of rock n’ roll were already perceived as has-beens. Pop was dominated by teen idols and novelty songs.

Lennon, a revolutionary himself, saw that Pop was ripe for disruption. He formed the Quarry Men in 1956 precisely to foment that revolution, combining Scouser Skiffle music with the American rock n’ roll that he loved. A year later, John met a 15-year-old Paul at a church garden party—and the rock n’ roll revolution began.

In the early days, the Beatles were Lennon’s band. He was the de facto leader and front man. But after Beatlemania peaked around 1965, Lennon’s revolutionary zeal began to take a back seat to McCartney’s evolutionary drive. It was Paul who pushed the band forward creatively. Sgt. Pepper’s was Paul’s idea; so was the Magical Mystery Tour and side two of Abby Road. Without Paul’s relentless quest for incremental improvement, the Beatles might well have broken up after their manager Brian Epstein’s death.

The point is: Revolutionaries often don’t know how to handle success once the revolution is won. More often than not, it’s the evolutionaries who pick up the torch and carry it onward.

The end of loyalty evolution

The customer loyalty revolution began in 1981, when a group of maverick American Airlines marketers realized that a small core of passengers was responsible for the lion’s share of the airline’s revenue, and it made sense to reward and recognize them for their loyalty. As the concept of loyalty marketing spread beyond the airlines to hotels, retailers, and the consumer credit industry, the evolutionaries took over. For the past forty years, loyalty evolutionaries have pushed customer strategy ever farther—incorporating new business models, repeated tech waves, and customer experience innovations to make loyalty marketing the multi-billion-dollar industry it is today.

But evolutionaries, too, eventually run out of steam. Forty years later, it’s clear that loyalty marketing is in a rut. The classic model of points and perks is essentially unchanged from its original conception. Programs have become big and bloated, leaving millions of unengaged program members languishing in databases around the world.

Yes, talented loyalty evolutionaries have incorporated gamification, partnerships, coalitions, even NFTs and cryptocurrencies into our collective toolbox. But the toolbox itself is the same well-worn container into which we’ve been cramming our shiny new tools since Ronald Reagan was president. Try as we might to continually evolve our legacy programs, the results have been flat or declining.

And a confluence of new technologies and events has resulted in a commercial sea change that may capsize even the largest and most established customer loyalty initiatives. AI and machine learning, the demise of third-party cookies, government regulation, global inflation, climate change, Brexit—you name it, these macroeconomic forces will upend your customer strategy.

Don’t you know it’s gonna be all right

That’s why it’s now time for we loyalty McCartneys to find and harness our inner loyalty Lennons. Time to rethink every aspect of our customer strategy. Here are just a few of the lanes of that strategy ripe for disruption:

Loyalty models: It’s time to throw out the dog-eared points-and-perks playbook and devise loyalty strategies that reward and recognize customers in real-time through hyper-relevance, dynamic personalization, and micro-moments of recognition.

Loyalty technology: AI and machine learning will transform marketing in ways as profound as the advent of the internet and the smartphone. Your challenge: Focus on practical uses of that technology that result in quantifiable and profitable customer behavior change.

Sustainability: As the planet heats up, your customers will demand that brands move beyond greenwashing and develop meaningful sustainability initiatives. Loyalty marketing provides a trusted platform to work hand-in-hand with your customers to deliver real results.

Loyalty partnerships: The multi-merchant loyalty coalition may be dead, but loyalty super-partnerships, in which like-minded brands join forces to supercharge their marketing efforts, live on. Expect to see more revolutionary brands break down the walls to deliver supercharged value propositions.

There’s only one problem with the “loyalty revolution” metaphor: Revolutions can be messy and destructive. When contemplating that fact in his song “Revolution,” John Lennon famously said, “Don’t you know that you can count me out?” In fact, there’s another Lennon song that speaks to the moment: “Imagine,” a peaceful but determined plea for a better world.

In the case of loyalty marketing, it’s a re-imagination that’s required: A foundational deconstruction of every single aspect of your customer loyalty strategy, technology, and partnerships. You can’t do it all at once. But you can take the first step, and you’ll find a lot of other loyalty revolutionaries marching alongside you. Be a John Lennon—until the revolution is over again, and it becomes time to embrace your inner McCartney.

To reimagine your own customer strategy, join us in London for the Loyalty Summit on 21 September. VIP pricing ends on 11 August, so visit www.loyaltysummit.com to reserve your spot today!