Mastering Loyalty Communication Strategies

Ms Chan

Welcome to Loyalty Unlocked! An AI-driven podcast that takes you behind the scenes of one of the most ambitious and successful coalition loyalty programmes ever launched. yuu Rewards in Hong Kong!

Ms Chan

This is the first episode so feel free to give us feedback on what we can improve and what more you'd like to hear about. For full transparency, the voices and script you hear within this podcast are totally AI generated and are based on chapters from the forthcoming book on loyalty marketing by my co-host, Mark Sage.

Ms Chan

Alright, let's dive right in. Mark, you’ve described marketing communications as the ‘fuel’ for loyalty programs, and honestly, that analogy really stuck with me. But, why do you think comms so often get overlooked in favor of, you know, points or rewards?

Mark Sage

It’s a good question, and one I’ve seen play out far too often. I think it’s because mechanics like rewards or points are tangible. They’re easier to measure and definitely easier to pitch in a boardroom. Communications, on the other hand though feel softer and almost invisible. But here’s the reality: a loyalty program without proper communication, no matter how great the rewards structure, just doesn't move forwards. It’s like—you wouldn’t build a car and forget to add fuel, right?

Ms Chan

Right, you’re not going anywhere without that fuel.

Mark Sage

Exactly. And I’ve learned this lesson the hard way. When we were designing yuu Rewards, we focused heavily on getting the loyalty mechanics right—the points, the offers, the app, the economics. But, honestly, the comms? They were a bit of an afterthought initially. We were so focused on getting the main programme elements up and running, the overall loyalty marketing communications had to take a back seat initially.

Ms Chan

Wait, so you’re saying even in a project as massive as yuu Rewards, the communication strategy wasn’t front and center?

Mark Sage

You’d be surprised. I mean, yuu Rewards was a coalition program with more than 10 brands involved—it’s now the biggest consumer platform in Hong Kong. But back in early 2019, we were focused on the mechanics that needed to be built, integrated and tested. It takes effort and time to build something new. Comms though tend to leverage existing systems - so whilst you're implementing the marketing automation tools, you're not yet really thinking about what goes into them.

Mark Sage

So when we first started mapping out marketing journeys, we hired an agency to help us. Honestly, their initial strategy felt like something we could’ve brainstormed on a whiteboard ourselves. It was cookie cutter stuff with welcome journeys, nurture, redemption emails, that kind of thing. Neat and functional, but uninspired.

Ms Chan

So, what did you do? Did you end up reworking it?

Mark Sage

We did. A couple months later, we had another go at it internally. But to be fair, even then, we didn’t stray far from the industry rulebook. And that’s the core challenge—everyone follows the same formula: lifecycle comms triggered by member behaviors, the standard ‘earn and burn’ journey. It’s fine, but it’s not enough. I feel we missed opportunities as a result.

Ms Chan

Like what, specifically?

Mark Sage

Well, for starters, I feel we leaned too heavily on foundational communications—things like welcome emails, redemption reminders, or birthday greetings. These are useful, sure, but they’re not what builds loyalty. Let me give you an example. One of the most valuable communications we implemented was operational—not marketing—but operational. When members earned points, they’d immediately get a push notification saying, “You’ve just earned 1000 points!” That simple instant feedback—giving them that little dopamine hit—was far more effective at driving engagement than most of our lifecycle emails.

Ms Chan

Ah, so tying communication to real-time actions created that connection?

Mark Sage

Exactly. It reinforced the behavioral loop—purchase, reward, repeat. But we didn’t double down on this approach as much as we could have. Looking back, there was a gap in our strategy. We followed the playbook—emails! campaigns!—but didn’t challenge it enough. For example, one thing the Aimia “7 Campaigns” white paper discussed was making your brand part of a member’s daily routine. Surprisingly, we didn’t emphasize that as much in yuu’s early comms.

Ms Chan

So, if you were doing it again today—

Mark Sage

—I’d rethink how we approached all communication. Marketing messages aren’t just about announcements or offers. They need connect with all customers, not just regular ones, and they need to build the brand, not simply trade driving. But this is something we'll unpack in more detail in a later podcast. For now, there is more we need to discuss around the traditional framework as I feel there is a more strategic way to implement it.

Ms Chan

Alright, I’m intrigued. Let’s break that standard framework down next and see where it really works—and where it may fall flat.

Ms Chan

Alright, Mark, let’s break it down. You’ve got this standard loyalty communication framework—what are the main types of communications we’re really talking about here?

Mark Sage

Well, broadly speaking, there are four core types: Lifecycle , Operational , Targeted, and Campaign Communications. Each plays a distinct role, and their effectiveness really depends on how you use them. Let’s start with Lifecycle Communications since they’re kind of the foundation for most programs.

Ms Chan

Right, so these are things like onboarding emails or sending reminders when customers are slowing down, right?

Mark Sage

Exactly, it’s the “Learn, Earn, Burn, Churn” model—which probably sounds familiar to anyone in loyalty marketing. Lifecycle Comms focus on getting customers onboard, nurturing them to engage early on, and trying to re-engage them if they drop off. And sure, these can be automated to run in the background, which is a major advantage.

Ms Chan

Sounds straightforward enough. But earlier you hinted that relying too heavily on Lifecycle Comms might not be the best approach. Why's that?

Mark Sage

Because they’re only part of the picture. Don’t get me wrong—they’re necessary. I mean, you need those foundational elements like welcome journeys and lapsed member campaigns. But here's the problem: lifecycle strategies can become more of a tick-the-box exercise. They tend to be reactive rather than proactive. For instance, most lifecycle emails target lapsing customers with generic nudges—“Hey, come back!”—but they struggle to truly engage broader behaviors in a meaningful way.

Ms Chan

So they’re more about maintaining the status quo rather than driving real growth?

Mark Sage

Exactly. And here’s where we often fall short—we stop at Lifecycle Comms and fail to build out the other streams effectively. Look, Lifecycle is great for onboarding or tackling churn, but it’s not really designed to move the needle. That’s where Operational and Targeted Communications come in.

Ms Chan

Right. And how do Operational Communications differ? They sound a lot less glamorous.

Mark Sage

Not glamorous, no, but essential—and hugely underestimated. Operational Comms respond directly to member actions. So, when someone earns points, redeems rewards, or unlocks a challenge, they get an immediate notification. This type of communication is reinforcement messaging. It’s less “marketing” and more “moment-driven.” It validates what the customer just did and strengthens that behavior loop.

Ms Chan

Ah, so it’s less about selling or reminding, and more about reinforcing that, hey, you’ve done something great here.

Mark Sage

Exactly. And the beauty is, because it’s tied to an action they initiated, operational messages are more likely to be well-received. Real-time feedback, like a push notification saying “Congratulations, you just earned 500 points!”—that’s what keeps people engaged. It’s instant validation.

Ms Chan

And I guess this is where a lot of programs miss the mark?

Mark Sage

You got it! At yuu Rewards, we saw incredible engagement with those real-time operational touchpoints. They’re such a simple way to create small emotional hooks or “micro moments” that bring members back again and again.

Ms Chan

Alright Mark, we’ve explored how Operational Communications reinforce and validate customer actions. Now, let’s turn to the next piece of the puzzle—Targeted Communications. What sets these apart and makes them so critical in loyalty strategies?

Mark Sage

Targeted Communications are powerful because they’re inherently data-driven. They aren’t just about reacting to customer actions like Operational Comms; they’re about anticipating behaviors—essentially nudging members toward desired actions that align with business goals.

Ms Chan

Hmm, so kind of like… being proactive instead of reactive. Can you give an example of how they work in practice?

Mark Sage

Sure. At yuu Rewards, we used member purchase data to identify patterns. Take grocery shoppers, for instance. If someone typically only did big, weekly shops, we’d use targeted offers to encourage mid-week top-ups—think discounts on fresh produce or ready-to-eat meals. The idea was to shift their behavior subtly but strategically.

Ms Chan

Ah, so you’re identifying opportunities in their habits and trying to fill the gaps?

Mark Sage

Exactly. And the beauty of it is that the more data you have, the more precisely you can target. Another example is cross-partner promotions. If someone primarily interacted with a single partner in the coalition program, we’d send targeted messages about other partners they hadn’t explored yet—like offering bonus points for making a purchase at a participating pharmacy or restaurant.

Ms Chan

Got it. But I imagine implementing these strategies isn’t always easy, right?

Mark Sage

Thats correct. The challenge with Targeted Communications is that they don’t always get the upfront attention they deserve because, on day one, there’s minimal data to work with. Most loyalty programs focus on Lifecycle Comms as their default, and targeted strategies often take a backseat until enough data accumulates. But this delay is a missed opportunity.

Ms Chan

And do you think that’s a mindset issue? Like people just don’t think in behavioral terms?

Mark Sage

It is. Most teams approach loyalty programs through the lens of “loyalty ladders” or lifecycle stages. Instead, we should look at customer behaviors—what they’re doing now and what we want them to do next. By aligning communications with these behaviors, we can drive real growth, not just maintain engagement.

Ms Chan

So it’s about flipping that perspective. And speaking of perspectives, looking back at your own experiences, how would you say loyalty communications have evolved since, say, 2019?

Mark Sage

Oh, they’ve definitely come a long way. Back in 2019, we were still very tethered to the traditional frameworks—welcome emails, nurture journeys, birthday messages. Functional but limited. Since then, there’s been a shift toward more integrated approaches.

Mark Sage

Real-time feedback mechanisms, like in-app notifications or personalized push messages and offers, have become game changers. And the use of AI to help personalize at scale? That’s transforming the game entirely.

Ms Chan

What challenges still remain, though? It feels like there’s always something more to refine.

Mark Sage

Absolutely. One major challenge is breaking free from traditional thinking. Many brands are still running on autopilot, sticking to the “earn and burn” model without questioning its limits. But another big hurdle is internal—getting stakeholders to view communications as not simply trade driving, and loyalty channels as not simply CRM. It frankly, needs a mindset shift to make this happen and thats the topic of our next podcast!

Ms Chan

Sounds intriguing Mark and I'm really looking forward to that discussion. For the moment, if there’s one piece of advice you’d give to someone building their loyalty program today?

Mark Sage

I'd say, don’t undervalue communications. They’re not just a support function—they’re the bridge between your program, your customers and your brand. Use them strategically, integrate them into every layer of the experience, and always think behaviour first. That’s how you create loyalty that lasts.

Ms Chan

I love that—communications as the bridge. Alright, Mark, this has been such an insightful conversation, and I’m sure our listeners have taken away plenty of actionable ideas. Thank you for sharing your expertise!

Mark Sage

Thank you. It’s been a pleasure.

Ms Chan

And on that note, we’ll see you next time on "Loyalty Unlocked." Bye for now!