Technology alone is rarely the answer to business questions.
I feel compelled, even as a marketer, to begin with this statement. Why? Well unless the technology that you select is adopted by your business and has the functionality you need and can use, it could be the best technology in the world and it would still not meet your needs.
That said, the area of loyalty and customer marketing is notoriously underinvested in from a technology perspective. Despite the well understood refrain that retaining customers is more profitable than acquiring them, teams still are expected to roll their sleeves up, change their processes, and find the resource to put their data into action. Somehow there needs to be a way of making what is an uncertain investment more certain so that the opportunity that lies within customer loyalty can be realized.
More from PostFunnel’s Loyalty Series:
Chapter 1: What Is Loyalty and How Do You Recognize It?
Chapter 2: What You Need and What You Don’t to Build Loyalty
Chapter 3: Measuring Loyalty – What Are the Important Metrics and How Do We Find Them?
Chapter 4: Is Personalization Relevant in Loyalty Marketing?
Chapter 5: Rewarding Loyalty to Drive Growth
Technology – a game changer
Less than ten years ago, I set about designing a loyalty engine with an internal team of developers. As a marketing manager, I had a clear idea of what I wanted to be able to execute and the needs were easy to define. At that point, loyalty was all about rewarding transactions.
Within two years, I outpaced that technology and moved on to an enterprise solution that could better cater for data warehousing and automated list creation. It came with a lot of promises but it was still transaction based, convoluted and far from realtime. The expectations for growth and the desire to improve the customer experience was, at that point, way ahead of the readily available technology.
The real game changer arrived with the introduction of event-based tracking and customer data platforms. Of course, this type of technology wasn’t created solely for the purposes of loyalty but suddenly the technology had caught up with the desire to get a persistent view of customer data in realtime. It could make it accessible to other systems and also to the marketing teams, not just analysts. It was a moment I will never forget. I suddenly felt as a loyalty manager that I could do my job.
The point here is that as your ideas evolve, so will your needs and the only requirement of your technology is that it keeps up with your needs. Your decisions really need to be around whether you piece various pieces of software together or solve to create that within the one system.
Old tech
The difference that advances in customer data technology have made is monumental. Before this, loyalty engines and associated databases were simply collecting large volumes of indecipherable data. They, together with data analysts, were doing the heavy lifting on point calculations and segmentations. So, it was possible to do targeting but it was a lengthy process and let’s face it, nobody was friends at the end of it. These approaches weren’t actually revolutionizing businesses at all.
Improving campaign performance and taking the load off the day to day demands on a marketing team was reliant on something that could take data and make it actionable by someone who had no coding knowledge.
The need here was something that could handle data accurately and with integrity, could make that data accessible to marketing teams and could make it actionable so that marketing teams could take greater ownership and mobilize that data. After all, great results in an A/B test are simply an interesting test unless they can be scaled.
No amount of “will to win” from the marketing team could scale that without the right technology.
Tech advancements
If the driving factors behind loyalty, the behaviors and the rewards are about more than points and plastic cards, then the technology also has to offer more than that. Now, with the ability to track events, create dynamic, relevant and event based segmentations, connect that data to all available marketing channels consistently and measure at customer level – these customer data platforms have unlocked the potential for identifying loyal behaviors without a card or a point in sight. This has to be a good thing in changing the loyalty landscape and allowing marketing teams to nurture those loyal behaviors.
Advances in loyalty technology mean that customer experiences can be better managed and driven predominantly by an improved ability to create a single customer view. The focus can now shift from waiting for customers to respond to using insight, platform features, machine learning and your loyalty rewards to influence behaviors in line with virtually any of your business KPIs.
This matters because being able to predict and anticipate at customer level is powerful when using customer data to drive performance. It means that loyalty is no longer about the reward, gift or a discount but is actually about managing the experiences and the relationship your customers have with your brand. It gets loyalty back on the trading table as an influencing factor for growth, rather than a drain on profitability.
Your business needs
When considering business needs, design a core statement of intent and keep coming back to that when defining your needs. This is a statement that the entire business can understand,
relate to and get behind and captures what you want to achieve with the support of your technology. Then move onto needs. Remember, however, that you are likely to have customer, business and data needs so approach them separately, they are not the same.
Your needs may be as simple as being able to reward events outside of the buying cycle or it may be about managing levels or tiers within the program. You may want to create exclusive subscription groups with fees or run reward mechanics beyond a price discount. It may even simply be about managing who gets the rewards and who doesn’t but this is all now feasible with the technology that is available.
Most importantly, many of these platforms have been built with marketers in mind so it won’t require you to wait in line for an available analyst or dial down your ambition because it can’t be achieved in time. It makes commercial sense for a business to have flexibility in how they run a loyalty program.
Loyalty program
Loyalty programs are costly to run and so your technology has to be flexible with you. This is worth paying particular attention to. Platforms now offer configurable options for how loyalty currencies are calculated and adjusted following returns and exchanges. And how rewards are processed and tracked, how data is stored and extracted, and how campaigns are managed.
You need to be looking for technologies that don’t ask you to compromise on how you do business and actually support you in creating a competitive advantage. These are huge steps forward as they are the things that remove the manual intervention which is often the limiting factor. And of course, can also be useful if you manage multiple brands.
Within one platform, it is now possible to have different models of loyalty program to manage the financial risks attached in launching. Models such as “earn and burn” are easily understood by customers but bring financial liability. Conversely, running programs based on preferential services for customers carries less financial risk. It takes the pressure off as you don’t need to know what will work before you invest in the technology.
You can test and learn within the same platform and then roll out the solution that is right for you, even by segment. Particularly in some industries, brands have had their fingers burned by running programs that had a high take up but were not sustainable. And so the more your technology can support your evolution and learning in a financially viable way, the better.
Practical solutions within your technology can be worth looking at more closely such as mobile wallets, electronic cards and apps. These all have a bearing on uptake and long-term use depending on your customer profile. In addition to this, the ability to control campaigns by variable touchpoint and call to action can also strengthen your engagement.
