For years, loyalty programmes followed a familiar formula: spend more, collect points, wait for a discount. But as consumers become more digitally savvy, that one-size-fits-all model is rapidly losing its appeal.
Research by McKinsey shows that companies that excel at personalisation can generate 40 per cent more revenue than average performers, underscoring the commercial value of understanding customers and tailoring experiences to them.
The shift is particularly significant in markets such as Kenya, where mobile money, digital banking and smartphone-based commerce have made digital engagement part of everyday life.
World Bank data shows that Kenya has one of Africa’s most developed digital financial ecosystems, with mobile money playing a major role in how people save, pay and transact.
For businesses, this creates a rich stream of behavioural data that can be used to move loyalty beyond generic points and discounts.
The result is a new contest for the customer, one in which artificial intelligence can determine not only what reward a customer receives, but when, where and why it should be offered.
Companies are increasingly using AI to analyse transactions, preferences and engagement patterns and turn that intelligence into personalised rewards designed to encourage repeat purchases, referrals and deeper relationships.
Roshaan Kulpoo, Vice President for Africa at rewards and engagement technology firm Xoxoday, spoke to The Star about the emerging opportunity.
Why did Xoxoday choose Kenya as its entry point into East and Southern Africa?
Kenya is one of Africa’s most innovative digital economies. Mobile money, digital banking, fintech innovation and rapid smartphone adoption have created an ecosystem where customer engagement has become a key competitive advantage.
Kenya also has a strong pool of technology and business talent. By combining Kenyan and Indian talent with our rewards technology, we believe we can contribute to a new generation of customer and employee engagement.
The old model of treating everyone the same is disappearing. It is no longer about one product for everybody. It is about understanding what different customers value and giving them something relevant.
What problem are you trying to solve for Kenyan businesses?
Financial institutions, retailers, telecom operators, insurers and digital platforms are all looking for smarter ways to retain customers and encourage valuable behaviour.
The challenge is that customers are different. What motivates one person may have little relevance to another.
A generic voucher sent to thousands of customers may generate some response, but a reward based on an individual’s behaviour, preferences and lifecycle can be far more meaningful.
Our objective is to help organisations make loyalty more measurable and data-driven while creating better experiences for customers.
Why is personalisation becoming so important in loyalty?
Customers today expect brands to understand them. They expect relevant communication rather than a stream of generic offers.
Traditional loyalty programmes often reward everyone in broadly the same way. AI changes that equation by analysing behavioural data and helping businesses understand customer preferences, transaction patterns and lifecycle stages.
Instead of simply saying, “Here are 100 points,” a business can say, in effect, “We know what you value, and here is a reward that matters to you.”
That creates a much stronger relationship.
How does Generative AI change customer engagement?
Generative AI makes personalisation much more scalable. A business may have hundreds of thousands or millions of customers.
It is impossible for a human team to manually design a different engagement strategy for every individual.
AI can identify patterns and help businesses determine which customer should receive which offer, through which channel and at what point in the customer journey.
The objective is not simply to give more discounts. It is to make every reward more relevant. That can improve customer satisfaction while making the company’s loyalty investment more efficient.
Does this mean the traditional points system is dead?
Not necessarily. Points can still work. The issue is whether they are connected to a meaningful customer experience.
The future is about moving from transactional loyalty to relationship-based loyalty.
A customer could earn points for purchases, but also receive recognition for referring a friend, using digital payments, saving regularly, adopting another product or reaching a milestone.
Artificial intelligence helps organisations connect those behaviours and determine which incentives are likely to produce the desired outcome.
How can this translate into higher revenues for businesses?
Loyalty should ultimately produce measurable business value.
The metrics can include customer acquisition, retention, repeat purchases, referrals, active users, campaign participation and customer lifetime value.
Personalisation is important because it allows organisations to spend their loyalty budgets more intelligently. Instead of giving the same reward to everyone, they can target incentives according to behaviour and customer value.
How can rewards contribute to financial inclusion?
Financial inclusion is not simply about opening an account. It is also about encouraging people to actively use formal financial services.
Rewards can encourage behaviours such as using digital payments instead of cash, saving regularly, adopting insurance, using digital banking services, responsibly borrowing, or accepting digital payments as a merchant.
When customers are recognised for those behaviours, organisations can encourage deeper participation in the formal financial ecosystem.
Kenya provides fertile ground for this because mobile financial services are already deeply embedded in everyday transactions.
What opportunities do banks have?
Banks are increasingly competing on customer experience, not just products and interest rates.
There are opportunities in debit and credit-card loyalty, SME engagement, digital onboarding, savings and investment incentives, merchant-funded offers, personalised promotions, referrals and lifestyle rewards.
Imagine a bank understanding that a particular customer frequently travels, shops online or pays school fees digitally.
Instead of offering that customer a generic reward, the bank can provide benefits that correspond to those behaviours.
That makes the customer feel understood while allowing the bank to deepen the relationship.
Does the opportunity stop at banking?
Absolutely not. Insurance companies can reward safe or healthy behaviours. Retailers can encourage repeat purchases. Fuel companies can strengthen customer loyalty.
Telecom operators can promote digital-wallet usage. Airlines can enhance frequent-traveller programmes.
There are also opportunities in healthcare, education and government services, where rewards can encourage participation in wellness programmes, learning activities or digital public services.
The underlying principle is simple: identify behaviour that creates value and recognise it in a meaningful way.
You also work on employee engagement. Why is that important?
Customer experience begins with employee experience.
An employee who feels recognised is more likely to feel connected to the organisation. Recognition can support engagement, collaboration, innovation and service quality.
Technology allows companies to make recognition more timely and consistent. Instead of waiting for an annual appraisal, organisations can recognise achievements, milestones and contributions as they happen.
How can generative AI improve employee recognition?
AI can help organisations personalise recognition according to an employee’s role, achievements, milestones and preferences.
It can suggest appropriate recognition, help managers identify achievements and give HR teams insights into engagement trends.
But AI should not replace human appreciation. It should make human appreciation more consistent, timely and meaningful.
How do you measure success?
Organisations increasingly want proof of return on investment.
We look at metrics such as customer acquisition, retention, digital engagement, active users, campaign participation, redemption rates, repeat purchases, referrals and customer lifetime value.
For employees, the metrics could include engagement, participation, recognition frequency and sales productivity.
Data allows organisations to see what is working and continuously refine their programmes. Xoxoday now serves more than 65 million end users, with more than 5,000 customers across more than 150 countries and a rewards marketplace offering millions of options.
What is your message to Kenyan business leaders?
Kenya has already demonstrated remarkable leadership in digital innovation. The next step is to deepen those digital relationships.
Businesses should look beyond simply acquiring customers and ask how they can make those customers stay, engage, spend more, refer others and become advocates.
Where do you see the future of loyalty in Africa?
Africa is entering a new era where engagement will become a strategic differentiator.
The future will not belong simply to the company offering the biggest discount. It will belong to the company that understands its customer best and delivers the most relevant experience.
