Bill: Welcome everyone.
Bill: I’m Bill Hanifin, the managing editor of The Wise Marketer.
Bill: And we are here for another episode of The Wiser Loyalty Series.
Bill: This month, this particular episode being a future look at Loyalty Technologies.
Bill: I’m here with our CMO, Aaron Dauphinee.
Bill: Aaron, how are you?
Aaron: I’m well, Bill.
Aaron: How are you doing this week?
Bill: Good, good.
Bill: And we’re going to continue our technology focused discussions we’ve been having throughout the month.
Bill: So this is the end of the series for this particular month in The Wiser Loyalty podcast series for Let’s Talk Loyalty.
Bill: And if you’re not familiar, the series always features.
Bill: Our opinions, our thoughts, our insights, weekly perspectives on constructs from The Loyalty Academy curriculum.
Bill: That’s part of, that leads to and is part of the Certified Loyalty Marketing Professional Designation.
Bill: So we’re going to continue kind of wrap it up, cap it off, if you will.
Bill: And just to recap, and you’ll see some of this summarized on Let’s Talk Loyalty and also on The Wise Marketer.
Bill: But we’ve so far this month, we’ve talked about what’s trending in loyalty tech.
Bill: Technology, the AI and how it’s changing the way marketers work.
Bill: And we’ve also talked about just how we’re trying to develop a 360 degree view of the customer.
Bill: So we’ve kind of gotten deep into it.
Bill: And today we’re going to talk about a future.
Bill: What’s the future hold?
Bill: So we’ve got a few kind of questions that we’re going to walk through and bounce back and forth and compare notes on a few things.
Bill: So Aaron, you might want to start just, you know, we’ve talked to sort of a theme and the way we’ve done a lot of these podcasts is to clarify definitions, to clarify terminology, to kind of vet buzzwords and things.
Bill: So we talk a lot about definitions and getting to a common industry vernacular in all aspects of loyalty marketing, but in particular with loyalty management systems.
Bill: And a lot of times we hear these questions about, do we really need a loyalty management system?
Bill: You know, does the LMS stand alone?
Bill: Should it be replaced by a CRM system or maybe a CDP or something like that?
Bill: But what’s your take on that?
Aaron: Yeah, I think the real crux of it comes down to the loyalty management system is a bit like what we talked about in last week’s episode, where we’re looking at kind of a root system that is the core.
Aaron: And from there, you start to have these peripherals of other technologies that build on top of them, that root core.
Aaron: And so for me, that’s why the LMS system as it would be, should always be a part of your technology stack in some form, because it’s a component that carries a holistic view in terms of the things that you’re trying to do with your loyalty rewards program.
Aaron: And by virtue of that, then extends into other parts of the enterprise and can start to collect it holistically.
Aaron: And we can get into a few minutes of whether or not that needs to entail the marketing functions, the fraud and credit services functions.
Aaron: You can go on in terms of the list, operational aspects as well, too.
Aaron: They can be piece meals together or they can be holistically in one, but the point being there is this core center kind of starting point and we would be advocates to say that the LMS is that and that a CRM system is in connection with or in conjunction and would work in service of each other back and forth.
Aaron: Same with the CDP as a component of that higher order architecture, if you will.
Aaron: So I think that’s kind of my perspective in view from the industry.
Aaron: I know we’ve spoken, we’re both not technologists by any means.
Aaron: We come from the marketing side of this conversation to some degree.
Aaron: But when I speak with CIOs and CTOs, one of the common things that we hear percolating up is in fact, well, if you’re having a conversation about whether an LMS is replaced by a CRM or a CDP replaces it, you’re really probably at that kind of mid to mid-senior level in terms of the organization, and they’re not really taking a holistic higher order view that they need to around what’s entailed for getting a full view of the customer.
Aaron: We talked about that last week in our 60 View podcast.
Aaron: Really there is a question of if this type of conversation is percolating your organization, take a look around and see who’s having it.
Aaron: If it’s not at the C-suite level or the board level even, then there might be a systemic issue that’s at bay here about putting the cart before the horse as they used to say.
Aaron: I think that’s one watch out that we’d hear from technology assist is make sure that you have a true understanding of what it is you want to accomplish with your customer set.
Aaron: Then from there, the technology is in service of not the other way around.
Aaron: That’s my perspective on that.
Bill: You might have what I hear you saying, if here we are future look at loyalty technologies, I guess what you’re saying in so many words is that loyalty management systems continue to be relevant.
Bill: In fact, they’re standing toe-to-toe with the CDPs and the other kind of what might be considered quasi-enterprise systems that the business would have.
Aaron: Yeah, I think they’re all interconnected.
Aaron: I don’t think you can get away one without the other, or at least if you have that larger customer view.
Aaron: If you’ve got simple aims, then one might be good enough for what your purposes are.
Aaron: But if you’ve got that broader enterprise view as you alluded to, then I’m going to suggest that they need to be interconnected and come in coexistence with each other to some degree.
Aaron: Okay, so on that, let’s continue the theme of talking about terms that are really quite questionable or maybe people don’t know enough about or what are the role that they play for us as impacting our loyalty operations in our program or even as a higher order looking at in service of the customer.
Aaron: But we’re hearing a lot about modular technology, things like microservices, headless tech.
Aaron: You’ve got an opinion probably on this.
Aaron: I know you’ve got some things in the work as you talk with a few folks in the industry.
Aaron: What are these terms having in terms of impact on loyalty marketers and what should we watch out for?
Bill: Well, it’s interesting.
Bill: It goes back to the first question about clarifying terms and technology because I heard each of these from different sources.
Bill: I think they have different meanings to different people, but they do coalesce.
Bill: That’s one of your favorite words, vector towards each other.
Bill: It is.
Bill: To me, generally speaking, they’re trying to express the same thing.
Bill: If I think about microservices, that’s a term that’s originated in the IT area of the business, right?
Bill: People are thinking about microservices.
Bill: They’re microservices now that are built in all sorts of systems, not just loyalty, but modular technology, to me, expresses the functionality, like what’s the meaning of microservices to the business.
Bill: It’s because now you have a modular set of services.
Bill: If you just want to turn on gamification or you need a chat bot or you need an AI feature that maybe isn’t already embedded in your core platform, well, you can add one of these microservices in quotes, which is a modular technology.
Bill: See how the words, they start to walk over each other.
Aaron: Yeah, they run together.
Bill: Yeah.
Bill: I know what the headless tech, I understand that too, it’s that we’re building the backend, we’ve got APIs, we’re not giving you a customer facing screen and that user interface UX type thing.
Bill: I understand that completely, but that’s also maybe a tough one when you’re trying to walk into a room full of business leaders, in line of business heads, executives, and if I were to choose one of these three, I’d probably talk more about modular technology than anything, just because it resonates with me.
Bill: I get that idea and I think it’s going to be important going forward, take all three of these now and just let’s talk about the concept.
Bill: Businesses are, we know this, having seen a lot of RFPs and knowing that a lot of the RFP focuses on reducing cost.
Bill: It’s not always that we even need more services or we need more functionality, more capability, it’s that we want to reduce costs.
Bill: We don’t want to rip and replace.
Bill: If your business model is a loyalty technology provider, it’s got to be a zero-sum game.
Bill: You take yours out, the incumbent, we go in and replace, that could be tough because that means a big investment with an 18-month project timeline, maybe not that long, I hope, but long.
Bill: The idea of modular technology being able to say, listen, let’s just provide what you need.
Bill: We can get it up and running quickly.
Bill: You can actually test with it, validate some business cases with it, and then decide if you want to go for it.
Bill: It’s like the nose of the camel in the tent a little bit.
Bill: If the micro-service, the modular technology works really well, I might like you a little bit better as a provider, and so we might take the next step and add in something else.
Bill: Maybe you’re doing, instead of rip and replace, you’re doing this gradual transformation, which is a different way to approach a business than it has been over the last few years.
Aaron: Yeah, I think that’s an important comment to make, is really like the early origins of this industry part of me.
Aaron: Well, really around this idea of we have to build it.
Aaron: Thirty years ago, we were not in this modular stacked type of structure or architecture that was in place, but it was like bring it in-house and make it from scratch, because we don’t have the trust in others to maybe provide it, and we don’t know what we don’t know in some instances.
Aaron: But by and large, you want to have control over it and what the impact is on those legacy systems that you’re talking about because in most cases, people have started to build them from root.
Aaron: But as the industry progressed, we start to get into more of a buy mentality in terms of going or a partner and have influence in terms of stacking things together and integrating things and being this interoperability, if you will, in terms of the sophistications of the technologies that are coming together.
Aaron: But more importantly, that there are certain technologies were being accessed because of their specificity.
Aaron: You talked about that with gamification is a good example.
Aaron: We can turn that module on.
Aaron: We don’t necessarily need to build it in-house anymore.
Aaron: By virtue of that, we don’t have to mix and match with their legacy systems.
Aaron: But in fact, there’s this ubiquity in terms of how these modular technologies or APIs integrate into the systems.
Aaron: And for that, it gives a certain amount of comfort for senior executives to say, we’re not going to have to do a multi-million dollar overhaul of something that we’ve already invested in just because the industry has turned and taken a new act in terms of how it delivers for customer experiences or even the technical competencies that come with operating just everyday loyalty program operations.
Aaron: So by and large, the sophistication around what we can do and as technology supports that, lends itself to being much more flexible, less rigid, if you will, in terms of coming together.
Aaron: And so what we don’t see as many organizations actually building and building solely within.
Aaron: And in fact, there’s probably very few that still are solely a build-it-only house.
Aaron: They at least have some elements that they’re integrating with third party technologies.
Aaron: And by and large, going forward, what do I see?
Aaron: I kind of predict out that that is going to be the way in which we operate.
Aaron: There’s no reason why we wouldn’t.
Aaron: And if you think about closed loose systems versus open source structures, there’s like, why wouldn’t you make sure that you always are available to integrate in the latest and next best things that are coming down the pipe and without disrupting the core too terribly much?
Aaron: I mean, that’s kind of my opinion from a non-technologist person’s perspective.
Aaron: IT folks may take a run at me and we can certainly in future conversations have some senior executives and technologists come in and lay out their opinion on this.
Aaron: I guess we’d be open to that as well too.
Bill: It’s interesting because anecdotally, this kind of transitions into our next topic about what time frames and future and things like that.
Bill: But it seems like also some of the RFPs that we’ve seen and some of the needs of retailers have been around addressing the needs of the business when they’re running on legacy technology that was built in house in a lot of cases, and it’s reached the end of its useful life.
Bill: So that question, I think we’re going to see that question being answered right in front of us over the next probably 18 months.
Bill: There’s a lot of these retailers that we’ve seen and talked to are facing that situation today.
Aaron: And I think one of the things that the marketing service providers have is a leg up, and certainly some of them do, I wouldn’t say all of them, but we’ve seen some good examples with a few folks, is that they’re taking the latest technologies and they’re finding ways to make sure that when you look at purchasing from them, you have this selection and choice, and the ability to say, okay, I don’t maybe need it right today, but it’s on my roadmap, and so I may want to turn it on.
Aaron: And so when I select a provider, I want to know A, that they have the capability or the module, if you will, to turn on at some point in the future downstream, or that they have a partnership with some other providers that allow them to be able to bring this together in a seamless and easy fashion, so that as the demands of my business start to change and my customer’s expectations evolve, I’ll be able to quickly turn on a dime from a technology perspective, and the technology is not the inhibitor to being able to deliver on a solid customer experience or award basis to some degree.
Aaron: So I think that’s probably what we’ll see is to have that flexibility and rigidity, as I said earlier, kind of go away, and I don’t think it’s necessarily going to be a build world, it’d be more of a Lego blocking connect world interoperability.
Aaron: So anyway, one again from some non-technologists, but I don’t know, I think that’s probably close to our time again.
Aaron: Do you want to bring us home this week?
Bill: Yeah, I can.
Bill: And just one other thing I’d ask you is, we’ve got AI, we’ve got a lot of focus on making changes and radically transforming the technology that we’re using.
Bill: And yet there is that factoid of tech debt, that tech debt exists in the companies.
Bill: And so even though I think a lot of businesses are racing as fast as they can, to understand what AI will do and adopt it into their business, maybe as well as other types of technology.
Bill: There’s a lot of projects ahead and a lot of projects where we saw it even coming out of COVID, just like a lot of retailers were putting in order and delivery and different things that they never anticipated.
Bill: So they pushed other projects out of the way.
Bill: Well, now they’re getting back to completing some of those projects.
Bill: It might be a point of sale transformation or something else.
Bill: So I think it’s going to be interesting to see how the CTO, the CIO balances the needs of operating the business today versus incorporating the latest sort of technology that can really transform the business.
Bill: Like how do you balance those two?
Bill: I don’t know if you have a thought on that before we wrap up.
Aaron: Yeah, I think it always goes back to like making sure that there’s a clear business case.
Aaron: I mean, this seems like the obvious answer in some degree, but like marketers get excited, you know, we get excited about the shiny ball syndrome.
Aaron: And really, I think it comes back to, if you’re not having conversations at a C-suite and higher level around how you want to interact with your customer and what the aims are in terms of the business, in terms of how you treat your customers, then you really won’t be able to answer that in an effective way because there’ll be inconsistencies with the organization.
Aaron: Marketing will want to go do something that’s kind of cool and clear and have all the reasons as to why you should do that.
Aaron: Well, the technology side is saying, well, if we do that, we can do it, but it’s going to disrupt all these other projects, as you just outlined as a clear example.
Aaron: So there’s some trade-offs and that then lends into, well, does that technology that we have in-house already, can it deliver on that or we’ll have to get some new stuff and what are the implications against that?
Aaron: And at some point, do we have, as you use term tech debt, I really like that in terms of it’s there, it’s on the books, either use it or lose it.
Aaron: And it’s not just because the latest shiny new thing is proven yet, right?
Aaron: Like that we just get rid of it.
Aaron: We probably want to keep it for a little while, figure out what the utility is, how much we can get out of it in terms of its lifespan to some degree, and then make a decision about getting rid of it.
Aaron: But I mean, that’s also another thing that technologists sometimes get hung up on is, is they just can’t let go, right?
Aaron: But I agree, often their logic is, why would I let go of something until it’s proven that we have a true business case in need and an eye towards the future in terms of what it is we want to serve, in terms of our KPIs and ambitions and objectives with the customer before we just go, you know, as they say, throwing the proverbial baby out with the bathwater.
Aaron: So anyway, that’s kind of a bit of a ramble at the end on my thoughts and views.
Aaron: And again, you know, we’re marketers who are putting these perspectives into play.
Aaron: We’re happy to take on thoughts and perspectives from CIOs and CTOs in other conversations.
Bill: Exactly.
Bill: That’s a good place to stop.
Bill: And so I hope everybody’s enjoyed this series that we’ve had on Loyalty Technology.
Bill: Today, this future look at Loyalty Technology has kind of capped off an overall look.
Bill: And everything that was inspired by our course 109 Loyalty Technology, there’s obviously a lot new and a lot being updated.
Bill: So if you want to learn more, obviously you can find that course and many more at The Loyalty Academy.
Bill: If you want to dig into previous podcasts in this series, then you can access the Wiser Loyalty Podcast Series at thewisemarketer.com and letstalkloyalty.com, of course.
Bill: So thanks to Let’s Talk Loyalty for making this all possible.
Bill: And with that, we’re going to wish you all a great week.
Bill: And we’ve got some pretty good ideas about what December is going to hold.
Bill: So make sure you come back and join us for the next episode of the Wiser Loyalty Podcast.
Aaron: Thanks, everyone.
Aaron: Stay well.
Paula: This show is sponsored by Wise Marketer Group, publisher of The Wise Marketer, the premier digital customer loyalty marketing resource for industry relevant news, insights and research.
Paula: Wise Marketer Group also offers loyalty education and training globally through its Loyalty Academy, which has certified nearly 900 marketeers and executives in 49 countries as certified loyalty marketing professionals.
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