Podcast Summary: The Agile Brand with Greg Kihlström®

Episode #812: Capillary Technologies’ Jim Sturm on Customer Loyalty as Enterprise Strategy

Date: February 12, 2026
Host: Greg Kihlström
Guest: Jim Sturm, President of North America, Capillary Technologies

Episode Overview

In this episode, Greg Kihlström is joined by Jim Sturm of Capillary Technologies to discuss the evolution of customer loyalty programs into core enterprise strategies amidst significant marketing technology changes. They delve into the shift from third-party to first- and zero-party data, the integration of AI, advanced measurement, and what it takes to create emotional loyalty and lasting differentiation in a competitive landscape.

Key Discussion Points & Insights

The Strategic Transformation of Customer Loyalty (03:21–04:52)

• Shift From Tactical to Strategic: Loyalty isn’t just a points-and-rewards program anymore, but a “dynamic, data-driven engine for the entire customer experience” ([00:41]).
• Impact of Data Privacy Changes: The demise of third-party cookies and evolving privacy laws have made first-party data, gathered with consent via loyalty programs, crucial.
  • “Loyalty has become a strategic weapon. One, because it works, and two, because laws and regulations and consumer privacy... you can no longer track me if I don’t consent to it.”
    —Jim Sturm ([04:42])

Loyalty Market Consolidation and Brand Expectations (05:20–07:19)

• Industry Consolidation: Capillary’s North American growth driven by four strategic acquisitions.
• Brands Now Demand:
  • Trusted advisors, not just tech providers
  • Data storage and advanced analytics (including zero-party data)
  • Personalization and predictive models via AI
  • Prescriptive, not just descriptive, technology solutions

AI, Predictive Analytics, and Personalization (07:49–08:32)

• AI Is Essential: Capillary has six years of experience using predictive analytics.
• Four Phases of Analytics: Describe, diagnose, predict, prescribe.
  • “The evolution and these expectations... is now heavily dependent on not just the data, but advanced capabilities within the platform...”
    —Jim Sturm ([08:23])

Integration and Omnichannel Experience (08:32–10:12)

• Adobe Partnership: Integration with Adobe enhances Capillary’s global reach and capability for real-time, omnichannel personalization.
• Practical Benefits: Brands combine Adobe’s consumer data with Capillary’s loyalty and first-party data for a robust personalization engine.

Measurement and Proving Business Impact (12:49–18:40)

• Traditional vs. Sophisticated KPIs:
  • Transactional: Incremental visits, purchases, and spend (incrementality)
  • Emotional loyalty: Repeat visits not driven by discounts, customer passion for the brand
  • Competitive advantage: Stealing share from competitors
• Emotional Engagement Example:
  • “If I say we’re going to go get a cup of coffee at this shop, [my daughter] smiles and gets excited. That’s emotional loyalty.”
    —Jim Sturm ([13:55])
• Proving Value to the C-Suite:
  • Focus on direct attribution: tie loyalty initiatives to P&L outcomes
  • “Every CFO tends to be a skeptic of loyalty initiatives... as long as the initiatives can be directly attributed to the bottom line... they are believers.”
    —Jim Sturm ([18:14])

Emotional Loyalty: Beyond Discounts (19:08–21:05)

• What It Looks Like:
  • Experiences that create joy (“is there a smile on their face?”)
  • Recognition, personalization, and product excellence
  • "Discount is a dirty word in the loyalty space. It is a drug that we don’t want people hooked on." ([19:19])
• Measurement:
  • Smiley-face surveys, behavioral measurement (repeat purchases without discounts), brand passion
  • Cited Apple and the “corner pub” as paragons of emotional loyalty built on product and experience

Future of Loyalty and Enterprise Infrastructure (21:18–22:54)

• Growth Outlook: Predicted to grow from $7B to $70B by 2035
• AI as ‘Table Stakes’: The future is prescriptive enterprise infrastructure, always-on and cross-functional
• “A year from now we’ll all say this AI stuff is cool, but it’s table stakes. Emotional loyalty is where it’s all at.”
  —Jim Sturm ([21:45])

Staying Agile (23:02–24:28)

• Staying Close to Consumers:
  • Regular consumer research and store visits to understand frontline articulation of loyalty programs
• Adaptability:
  • Emphasis on the need for speed, adaptability, and reacting to unexpected market “punches”
  • “Everybody has a plan until you get punched in the mouth. And that’s what’s happening to brands every single day.”
    —Jim Sturm ([24:13])

Notable Quotes

• "Loyalty has become a strategic weapon. One, because it works and two, because laws and regulations and consumer privacy is now stating that you can no longer track me if I don't consent to it. So loyalty initiatives are very strategic of nature."
  —Jim Sturm, [04:42]

• "A loyalty program at best may be a discount offer for a brand that I don't typically shop at. But that's not good loyalty. Good loyalty is around: I passionately love a brand because of their product and the experience with that product."
  —Jim Sturm, [13:44]

• "Discount is a dirty word in the loyalty space. It is a drug that we don't want people hooked on. We want to... take discounting, remove it from programs, and evolve to strategic weapons."
  —Jim Sturm, [19:19]

• “A year from now we’ll all say this AI stuff is cool, but it’s table stakes. Emotional loyalty is where it’s all at.”
  —Jim Sturm, [21:45]

• "Everybody has a plan until you get punched in the mouth. And that's what's happening to brands every single day... the need to be fast and stay adaptable is critical."
  —Jim Sturm, [24:13]

Key Timestamps

• Brief History & Shift to First/Zero-Party Data: 03:21–04:52
• Market Consolidation & Brand Expectations: 05:20–07:19
• AI’s Role in Loyalty: 07:49–08:32
• Integration—Capillary & Adobe: 08:32–10:12
• Loyalty KPIs & Measuring Impact: 12:49–18:40
• Emotional Loyalty & Brand Experience: 19:08–21:05
• Future of Loyalty – Looking Ahead: 21:18–22:54
• Staying Agile & Adaptive: 23:02–24:28

Overall Tone & Takeaways

• The discussion was pragmatic and candid, with real-world examples and a frank acknowledgment of both hype (AI) and reality (brand/product experience).
• Both host and guest emphasized the growing sophistication and expectation around loyalty, noting it requires both advanced technology and a deep, ongoing focus on customer emotion and experience.
• The message: The brands that win will be those that treat loyalty as an enterprise-wide, always-on, and deeply emotional engine—not just a marketing “tactic.”