Brands must rewire loyalty for a real-time economy

This article was first published in Marketing in Asia.

Loyalty is shifting from points alone to making “meaningful connections.” What does that look like in practice for brands in APAC where consumer expectations are evolving so quickly?

Loyalty is not just about transactions anymore. Brands in APAC are moving beyond a pure points-for-purchase model and focusing on personalized and relevant engagement. This could be through hyper-personalized offers, exclusive access to lifestyle experiences e.g., leveraging our priceless experiences, or even gamification that keeps customers excited and involved. For example, instead of only offering generic point accruals, a hospitality brand might use technology and data to suggest timely, location-based experiences (exclusive holiday packages, local event offers) in addition to the usual points rewards.

Many brands are investing in mobile and social channels, collaborating with influencers, and engaging younger consumers to build emotional connections that matter. AI has also moved far beyond basic customization – tools like Mastercard’s Shopping Muse show how natural language and contextual cues can be interpreted to deliver experiences that feel curated and empathetic, helping brands scale human connection across millions of customers.

APAC consumers (especially Gen Z and millennials) respond strongly to this; they’re looking for brands that understand their preferences, reflect their values, and provide experiences that feel personal and relevant. Meaningful connections are about meeting customers where they are, on the platforms they use, aligned with their lifestyles, so loyalty becomes part of a two-way relationship rather than just a currency. This shift helps brands earn loyalty by making customers feel heard and valued, not just “marketed to.”

Many companies now sit on vast amounts of customer data but struggle to activate it responsibly. What does “responsible personalization” mean to you, and how can brands strike the balance between relevance and trust?

Responsible personalization means using data in a way that delivers value to the consumer while respecting their privacy and choices. It starts with data that is responsibly collected, well-managed, and unified. Our approach is grounded in Mastercard’s Data & Tech Responsibility Principles, which build privacy, fairness, transparency, and inclusion into every engagement.

Brands that get it right ensure they have the customer’s consent and use those insights to make engagements more relevant in a welcome way. The balance comes from transparency and control: when a consumer feels a message is speaking directly to their needs (and on their terms), it builds relevance, but it must be done with consent and proper stewardship of data.

The key is to be open about what data is used and why, and to give consumers control (opt-outs, frequency preferences) so they trust that personalization is being done with them, not to them. When brands respect that trust, they can personalize offers in ways that feel like a service to the customer rather than an intrusion, achieving both relevance and peace of mind.

Experts often say that redemption is often the weakest link in loyalty. How can brands redesign redemption to be both seamless and transparent while still keeping the moment of choice purposeful and engaging?

Redemptions are more than just a transaction; they are an opportunity to reinforce trust and connection. It also needs to be frictionless and rewarding for customers. This can be done through:

• Making redemptions easy and clear. Customers should instantly know what their points are worth and how to use them. If people hoard a ton of points and never redeem, that’s usually a sign the program isn’t doing a good job highlighting value. Leading APAC brands are tackling this by designing redemption with simplicity and transparency in mind: clear point-to-value translations, visible in-app balances, and prompts at relevant moments to redeem.
• Offering more choice and flexibility to keep redemptions engaging. Rather than limiting members to one catalogue, successful programs let customers redeem in ways that suit them, whether that’s “pay with points” at checkout for small everyday rewards, or saving up for bigger rewards. We see growing interest in APAC for letting points be used like a currency.
  
  

Partnerships are also critical here. By teaming up with other brands, companies can allow points to be redeemed across an ecosystem. For example, one major Asian loyalty program now allows members to use their points with hundreds of partner outlets and even convert those points into other brands’ programs or airline miles – all through one app, with conversion rates clearly spelled out and a smooth, one-click transfer process.

This kind of open redemption network is seamless and transparent by design, and it gives customers a sense of freedom and empowerment in how they use their rewards. When done right, redemption becomes a highlight of the loyalty journey, reinforcing the loyalty loop at each use.

Many brands struggle to deliver personalization at scale. What separates those who succeed from those who stall?

Successful personalization at scale requires a strong data foundation and an agile mindset, as well as how well they harness customer data. The winners are those who break down data silos and consolidate customer information into a single, 360° view, then use advanced analytics or AI to act on those insights in real time.

A misconception that personalization only works with comprehensive datasets often leads to ‘analysis paralysis,’ preventing marketers from leveraging the data they already have. In reality, effective personalization can start with key, limited data points and be optimized over time as more insights become available.

The brands that succeed also often foster a culture of test-and-learn and innovation. They don’t treat loyalty as a set-and-forget scheme, but instead continuously experiment with different personalization tactics, measure what works, and iterate. They are also attuned to privacy and preference nuances, ensuring that as they scale up personalization, it does not cross the line into intrusion. Those who stall, by contrast, usually have data all over the place or a one-size-fits-all approach. They might blast the same offer to every customer or fail to update their segmentation as consumer behavior evolves. In APAC’s diverse markets, one-size-fits-all would have limited effectiveness since what works in one segment or country might not in another.

For example, an innovative sportswear brand that uses our personalization platform, Dynamic Yield, sees a 348x in ROI across campaigns and >500% increase in click-through-rate on non-core products, providing suitable product recommendations to complement their intended purchase.

Partnerships and coalition programs are expanding the loyalty ecosystem across industries. From Mastercard’s vantage point, which models are proving most effective in APAC, and why?

We’re seeing a lot of momentum in Asia Pacific around collaborative loyalty models. Firstly, co-brand partnerships. For example, when a retailer or airline partners with a bank on a co-branded credit card. These have long been effective in the region because they align closely with consumers’ everyday spending and offer mutual benefits (earn points faster, enjoy bank perks, etc.), continuing to thrive by integrating loyalty into payment behavior seamlessly.

Secondly, the rise of loyalty coalitions or “open-loop” ecosystems. More brands are teaming up so customers can earn and burn across a whole network of partners. This model is proving extremely effective in APAC. Consumers in this region value flexibility and choice highly. As such, they respond well when their favorite coffee shop, petrol station, grocery store, and airline are all part of one ecosystem, for instance. We’ve observed that while traditional coalition programs exist, many APAC companies are now creating more open loyalty ecosystems where a single brand’s program gradually invites others in. The effect is similar: your points become more versatile and useful across your lifestyle.

Partnership-driven models deliver added value that a standalone program simply can’t match. They also drive engagement for the businesses involved, as the shared currency encourages customers to interact with multiple brands in the network.

The most successful loyalty models here are the ones that break out of silos: whether through co-brand cards, coalition networks, or interoperable point ecosystems, APAC brands that collaborate are seeing greater loyalty impact.

For example, a coalition loyalty program powered by our merchant loyalty platform enables seamless in-app engagement across multiple brands from groceries, F&B, ride-hailing to airlines. This approach has seen more than 100% increase in redemption year-over-year, demonstrating the power of connected ecosystems in driving engagement and value.

If loyalty once meant ‘earning and burning points,’ and now it means ecosystems and personalization, what do you see as the next big frontier that marketers and retailers should prepare for?

The future of loyalty is about making loyalty omnipresent and experiential, blending into the broader consumer experience. We’ve gone from simple earn-and-burn to richer personalization and multi-brand ecosystems. Going forward, loyalty programs will evolve into holistic engagement platforms.

Marketers should prepare for loyalty to become “always on”, interacting with consumers in real time across various touchpoints. This could mean leveraging technologies like AI to anticipate customer needs and reward them proactively or integrating loyalty into emerging consumer arenas (for example, rewarding not just purchases but behaviors like social engagement, content creation, or healthy living, etc.). Essentially, loyalty might transcend the traditional program and become part of the product or experience itself.

At Mastercard, we often talk about designing loyalty through the lens of access, authenticity, and empowerment. When loyalty is woven into the fabric of what the customer is already doing or loves (be it gaming, travel, or everyday commerce), it becomes part of the experience.

In Asia Pacific, where digital lifestyles are the norm, we expect to see loyalty initiatives that tap into consumers’ passions in new ways. For instance, platforms where points can seamlessly turn into other forms of value that enrich life (e.g. letting people convert loyalty points into in-game currency or digital assets, bridging loyalty with entertainment).

This overarching theme is connectivity: loyalty will be about connecting various industries, channels, and experiences into one cohesive journey for the customer. The brands and retailers that start preparing now, by investing in flexible technology, forging unconventional partnerships, and ensuring they use data responsibly to deepen engagement, will be the ones ready to capture this future.