Welcome to a special episode of the Loylogic Podcast, marking the start of our 20th anniversary celebrations in 2025!
But this isn’t a trip down memory lane. Instead, Founder and Chairman Dominic Hofer and CEO Gabi Kool look ahead — sharing what the next chapter of loyalty and reward marketplaces will look like in a future defined by dynamic, AI-driven, global-scale incentive solutions.
They dive deep into restoring the Lost Art of Giving — exploring how to bring emotional depth and strategic value back into loyalty programs, channel motivation, and employee incentives. It’s all about making rewards feel personal again, not just transactional.
In this episode, you’ll discover:
- Loylogic’s differentiated approach — and why the real job is to reward a brand’s best customers with memorable, meaningful experiences
- How to strike the right balance between personalization and scale in an era of automation
- Why trust and collaboration with merchants and brands is key to building sustainable partnerships
- How Loylogic continues to embrace technology and push boundaries through its marketplace of the future
- Fresh insights into the potential of dynamic, AI-powered reward catalogs to truly transform the loyalty experience
If you’re in loyalty, customer engagement, or just curious about what’s next, this conversation offers a fresh take on where the industry is heading — and why the most exciting part might just be still to come.
Listen now to find out more. A full transcript of this episode is available below.
01:41: Dominic, I know I said in the intro that we wouldn't be reminiscing, but for context, take us back to 2005.What was missing in the loyalty industry that inspired you to start Loylogic?
Dominic Hofer: "Well, you know, 2005 is a long time back. So imagine a time when people are flying around collecting a ton of miles, but don't really have lots of options to redeem them, like you would see today. So it was basically flights and upgrades. And, you know, I was myself, sort of a frequent flyer, flying around collecting these miles, and never felt you get to the rewards that you wanted. And wouldn't it be amazing if you can use your points and miles for anything else other than flight rewards, maybe also non-air rewards. And that's how the whole idea developed.
"We started to think about shops, e-commerce shops, where you can use your points and miles instead of cash. How amazing would that be? And that's really how it started.
"We then also discovered that building global reward shops comes with a little bit of a challenge. In fact, you know, we created a global marketplace before Amazon was global, or was even a marketplace. So we had to actually program and invent a lot of things to add merchants to our shops and offer their products globally, which is all part of the platform. And then we obviously also felt like you need to have an option to pay in a combination of miles in cash, because many users might not have the exact amount of points to pay for their desired product. Loylogic actually has two patents on the full flexibility of points plus cash payments. That's how it started."
03:36: Looking back, and as you say, 20 years is a long time, what's the one major way that you've seen loyalty change?
Dominic: "First of all, when we started, there were a lot of frequent flyer programs. Today, loyalty is growing, right? It goes into FMCG or CPG markets. Many online shops have a their own loyalty program. The engagement or loyalty initiatives are many fold, and it's just amazingly growing, because it's a super, super, powerful marketing concept, right? You are somehow leveraging your community that you have as a company, and you try to create business around that community in a nice way. You're not just selling emails and databases. You're actually creating value for the partners around it through the selling of points and miles, mostly.
"But then, you know, there's always a bit of innovation that comes into the industry. I would hope that Loylogic, as the recognized innovator in the space, that we were at the forefront of bringing these elements to market. You know, we invented the marketplace slider, we were first to have auctions, first to have raffles. We built Pointspay, of course. I think more and more this industry is going in the direction of how can you, at scale, connect loyalty currencies and loyalty communities with merchant networks? With retail, be it online, but of course, also in store, and I think that that is where we see a lot of changes, and we can create value for the industry."
05:09: Do you think that rewards have been commoditized as loyalty has grown, and that there's been this loss of emotional value?
Dominic: "Yeah, when we talk in particular about rewards. I think my observation is the following: when we started, you had, maybe at best, a paper catalog that was sent home, and then you could order something via phone as a reward and so on. And we've sort of brought, like a digital shop, where you could order your products online to the market. I think that was exciting. And how did we differentiate? We actually had many, many categories and 1,000s of products that you can select from, which is, of course, a lot more than what you can put into a paper catalog. You know, click and it will be shipped home, wherever you live.
"But I think you know that marketplaces today, there are other marketplaces, that basically offer gift cards, maybe not as many products as we would do, or the combination of redemption methods, but I think it has become a bit, how should I say...almost a bit boring!
"I find there's a lot of programs out there, that just offer something as a reward in a simple reward shop. And, you know, consumers, they get these points and miles for free, so they should be happy if they get something. But for a true loyalty program, you know, the reward is not the points and miles that we're giving. It is what the user gets for the points and miles, and the reward is the thank you for the loyalty that the best consumers of a brand are giving to this brand. So this moment needs to be an amazing and rewarding moment. You cannot do this in super-simplistic reward experiences that are sold at ideally zero cost in the market. I think that whole experience, and it starts from the order process to actual delivery at home, needs to be a magic moment, you know, that deepens or strengthens that glue between the best customers and the brand even more. I think that's where value can be created and differentiation can be created in the market. I think that's the exciting world of rewards today.”
07:36: Gabi, that leads us nicely onto a topic you've spoken about before, which is bringing back the art of giving in loyalty. Why do you think the industry has lost that touch?
Gabi Kool: "Yeah, I think it's a little bit building on the example that Dominic just gave, right. The example that we always love talking about when we are with potential new clients, or with existing clients, is the lazy friend analogy. Imagine you go to the birthday party of your best friend, who has just turned 50. You've known each other for ages, and you come to that party. You say: 'Look, John, we've known each other for such a long time. And I was thinking, what kind of gift can I give to you? One that reflects all these years that we spent together and how well we know each other, right? And then you bring out your gift and you give that person an Amazon gift card. It's a horrible, lazy friend example.
"In a certain way, in our daily working lives, we are entrusted to look after the best customers, or the most important customers, or new customers of our clients, to create a memorable moment. And so we need to understand what these communities are and how we can make that a moment when that company gives a certain gift to that important customer that cements that brand loyalty and that relationship that the company has with that particular brand. So we like to think of that example in there. And with the rise of course of APIs and millions of SKUs at your fingertips, the temptation is there for many companies, and we've seen that, to just offer more and more and more, but not thinking about what is a truly meaningful offering or catalog or gift for that particular customer segment to make sure it's memorable.
"So, yeah, we think that the art of giving has gotten a bit lost over time in the industry, and we put a lot of emphasis on bringing back that art of giving, Austin."
Dominic: "I think if I can just add here, I think it's also important, you know, to say that if someone shops for a reward, right it's very, very different from shopping for any other product, right? So I'm sitting at home and I need to buy a coffee machine. I probably think about, where do I get the biggest selection? And I go to Amazon, and then I check the best price and product and whatever, I never think of my points and miles on accounts, and how I'm going to earn a reward trip, even if I have shopped there before. It's just not top of mind. So all of this is triggered through communication, through the program, and then when a user actually dedicates time, it better be a good experience, and not in terms of, I can select from a million coffee machines, but really, you know, there is a great price. There could be an attractive other product that I didn't think about, and maybe that's great for my kids and so on. It needs to be engaging, and I need to feel like this company actually cares and really wants to reward me, and then I feel good, and I, you know, continue to be loyal to that brand."
10:42: So what's stopping brands from getting this right?
Gabi: "Like I mentioned, I think with the rise of the API in the marketplace, it has increased access for a lot of loyalty operators or brands, but it made the rewards almost too transactional. So you see a lot of maybe cookie cutter approaches with too little impact, too little imagination. And so I think that's where a big challenge lies for a lot of these kind of programs.
"And the other part that we also see why sometimes brands don't get this right, is what we call the funding challenge. A lot of brands or loyalty programs continue to treat loyalty economics almost through the prism of a sales promotion logic. So they don't necessarily think about relying on margin funded rewards through proper points liability practices. So if you give people points and you expect them to redeem at some point in time for an exciting kind of gift, you need to also make sure that kind of the back of the house is in order that you put sufficient funding aside for when these kind of redemptions take place. We've seen some programs falling victim of their own success, when programs gain in popularity and members get more and more engaged, that if you treat it as a sales promotion logic, it means that you give the points now, and you basically kind of take it, maybe partially your financial books right now, if you don't set the proper money aside funded from the margin that you make on that transaction at that point in time, you've got a risk that you might not have sufficient funding for these programs when the actual redemptions take place.
"So there's a lot of art in getting these financial budgeting elements done properly, and very often, we help to untangle this complexity, let's say, for our clients to make it understandable, make sure that they have got also that part in place."
Dominic: "It's a very dangerous path. You know, you're basically successful in your program, but you don't follow with the money that you put aside to fund the rewards, and then you're basically cutting the value proposition. And you enter from a high of a growing program, you enter very quickly in a downward spiral by not having the funds ready, and you're killing an actually amazingly successful initiatives. It's very dangerous, a very good point, I would say.
"What brands sometimes might do wrong is start a loyalty program and give out points. But again, the points are not the reward, so you need to think about, what do I want to give people you know, against the points? How do I create that experience? And this experience needs to be right from the beginning, because that's actually the reason why members might sign up with the program, or actually not. The value needs to be there, and it needs to be a combination of products that are practical but also aspirational, things that might not even transact, but it creates dreams in my head, and that's why I want to participate in that program. I think Amex Membership Rewards does this pretty well as a standard proposition of every Program is an attractive reward shop which also has rewards in there that are not easily transactable, right? But they instill dreams and aspiration in users, and that's the reason why they want to participate in a program and use the credit card.
"As Gabi said, just offer an Amazon gift card and then you buy whatever you want. That's the same as cashback, and you give all the loyalty and all the brand loyalty over to Amazon. And that's not a good approach."
14:16: That's a nice pathway into the future of incentive marketplaces. Loylogic has always focused on being at the forefront of loyalty and driving innovation. So what's next for the future of rewards? What's going to maintain that loyalty and connection between brands and their best customers?
Gabi: "If you think about the marketplace of the future, right, of course we were the first to bring the incentive marketplace to the industry 20 years ago. And of course, we love to talk also about where we see this going in the next 20 years. Of course, with millions of products and brands and merchants at our fingertips in our ecosystem, AI is playing, and is going to play an increasingly important role.
"One example is making sure you curate from these millions of SKUs the right dynamic catalogs for the community or this particular program, and building your own ecosystem around that. So, we're investing a ton of effort and excitement in that particular space. AI will play a massive role in helping to create dynamic, high performing catalogs, but AI, of course, is not this standalone element. It needs to still be linked to the right kind of problems and curation and oversight of our own experts in the organization. AI helps with that part, but we continuously adjust that part to make these ever-evolving dynamic catalogs, but the curation and human oversight remain a very vital element in there.
"In the end, we think that the marketplace of future goes in that direction. We've got a ton of initiatives happening in that space. In the end, the objective doesn't change. It still comes down to, how do we make our clients' best customers feel honored, rewarded and truly kind of recognized in an exclusive manner. But yeah, clearly, AI is a massive force for the good here in taking that to a whole another level."
16:20: Dominic, if I can bring you in here.
Dominic: "So I think being able to access a lot of SKUs in the back is important, and then, as Gabi describes, using the latest technology to bring that in an effective way in front of the eyes of a consumer that, again, is not coming to that place because they look for a specific product. They're coming to the place because they were triggered through something, and now want to reward themselves, so they don't have time to browse through a million products. It needs to go fast, and it needs to be exciting and so on.
"Tech helps, but of course, you need to have access to the right and best products in the back. I think where value will be created in the future is not large catalogs and billions of categories. It is really more like, how can you effectively connect a brand and a brand story to a specific community through these reward shops? So these reward shops become media outlets that create these bonds. I think that's that's the super exciting part, which completely plays into that thinking that we described of rewarding someone, rewarding with special products, special packages, special pricing, special stories and interaction with the brand, which further inhales value into the loyalty currency that the brand is actually giving to their best consumers.
"I think these two combinations tech and bringing brands together with these communities is the exciting part."
17:51: So Gabi, if I can bring you back in here, it seems from what you're saying, that the future isn't just about endless choice. It's about getting the perfect reward at the right time, through that dynamic catalog, through those constant adjustments that deliver exactly what's needed at the right time. Is this where AI will really come into play?
Gabi: "Yeah, but to my point earlier, AI doesn't replace the kind of the curation or the human element in there, because I think one of the things that we pride ourselves on a lot is that over the last two decades, we build very deep relationship with the merchants and the brands that we work with around the world. We've worked with them for over two decades, and to be true and reliable partners to each other is very important. So it's a balance between, how do we get brands and merchants and their content in front of the right communities. AI is a big enabler for us in that process, but there's so many criteria that goes into the curation. On one hand, we need to make the currencies and the programs extremely successful for members. Our other part of our job is also to work deeply with the brands and merchants so that they can bring their latest products, their latest content, their latest exciting stories, in front of the right community.
"You heard Dominic talk about loyalty as a media type an example in there. AI plays a big role in there, but it's only a part of the story. It's not the full story, clearly."
19:20: Dominic, I guess, tied to this is another buzzword that we hear and read about all the time, which is gamification. So how does gamification fit with everything else we've heard today, as loyal logic strives to engage and reward the best customers?
Dominic: "You know, I think gamification is not necessarily related to rewards. You have two types of rewards. That's funded rewards, so I can buy something with points and can pay fully with it, or in non-funded programs where you basically work with a marketing budget. Then, you know, you have coupons, or you have concepts like raffles. They might look like a gamification element to some people, but the kind of reward I find is not really the gamification element. I think it's the journey.
"Understanding where you would like to move the behavior of a consumer through your program, through your app, through your brand, the full experience, and then build little surprises and the bigger prize at the end of it, into that journey. So I think it's the journey and the combination of free and paid rewards, restimulates short-term adoption of something, and the long-term rewards, the paid reward states let a consumer stick to the brand or the app, mid- to long-term, and combination of these elements, that bring this together. I find this gamification. I think there's many different views. I think it's always very specific to the exact goals that the brand has and and then, you know, needs a bit of creativity on how you answer to that. It's basically the definition of campaigns."
20:58: Okay, so that comes back to Gabi's point earlier, that too many people are going down the cookie cutter approach to loyalty, where instead you need to be creating bespoke programs that are right for your customers and your communities. Do you think that's fair?
Dominic: "For me, absolutely."
Gabi: "Yeah, it is."
21:13: Excellent. So 2025, marks, 20 years of loyal logic. What are you most proud of so far, and what's next on the journey.
Dominic: "We're a Swiss company. We started in a very small market, and from day one we knew that we'll have to go outside massively in order to win business, and we need to be different. So I think what our team has done super well is come up with innovation. Some things work super well. Some things did not work well. So there's constant learning. But you know that drive is completely there and part of our DNA. We have clients from Japan to Latin America, Brazil, Argentina to South Africa to Iceland, of course, in the Middle East. And I think just going out there and conquering these very different cultures and so on, trying to understand this and respond to their needs with solutions, not only once, but reselling these contracts and growing it, is amazing work and part of our DNA, and I'm personally absolutely the most proud of that."
22:34: Gabi, the same question to you.
Gabi: "I'm equally proud of working with our talented team. They're fun, they're smart and they're intellectually curious, which is very important in our job, right? Because one part is going to the different countries, but then we also work across all kind of different verticals. So you have to think about, how can we help this particular brand build the most admired coffee community in the world? And then the next day, you have to deal with an airline who wants to build out their frequent flyer program. Or then, basically, we got a new client with high performing athletes in Switzerland. They're building a very interesting proposition. So I think that our team is there to be curious, to help our clients and want our clients to succeed? And, of course, for us, that's an amazing journey to be a part of.
"The other part that I'm very proud of is that we've been operating for 20 years in the consumer loyalty space, but now we're also entering the motivational industry. So how we can help behavioral changes for employees and channel management in there via our new solution, Ultimate? I'm super proud that we're venturing into the next territory for us as a company, where we can leverage our existing technology and our global content, but with a slightly different twist. So I'm very curious to see how we're going to fare. I'm very proud of our adventurous spirit to continue pushing forward."
24:21: So to wrap up, do you have one final message to the industry that really sums up how you see loyalty going? So Dominic, let's go to you first.
Dominic: "Our job as suppliers to the industry is to make sure that the best consumers of a brand love their brand more, and I think that's why you build a loyalty program, to give back. So let's do that again with exciting concepts, so people really feel excited about it. That would be my message."
24:56: And Gabi, final word to you.
Gabi: "I think my final message to the industry is, the future of rewards isn't about offering everything. It's about offering the right thing at the right time in a way that makes customers truly feel valued. It's our job to really look after our clients' best customers and to avoid at all costs that these programs are seen as the lazy friend. We want to make them shine, shine, shine!"
