Paula: Welcome to Let’s Talk Loyalty, an industry podcast for loyalty marketing professionals.
Paula: I’m Paula Thomas, the founder and CEO of Let’s Talk Loyalty and also Loyalty TV.
Paula: If you work in loyalty marketing, you can watch our video interviews every Thursday on www.loyalty.tv.
Paula: And of course, you can listen to our podcasts every Tuesday, every Wednesday and every Thursday to learn the latest ideas from loyalty experts around the world.
Paula: Today’s episode is part of the Wiser Loyalty Series, which is hosted by our partners, the Wise Marketer Group.
Paula: The Wise Marketer Group is a media, education and advisory services company, providing resources for loyalty marketeers through the Wise Marketer digital publication.
Paula: And the Loyalty Academy program that offers the Certified Loyalty Marketing Professional or CLMP designation.
Paula: I hope you enjoy this weekly podcast, the Wiser Loyalty Series, brought to you by Let’s Talk Loyalty and the Wise Marketer Group.
Paula: I’m delighted to announce Capillary Technologies as the new title sponsor for Loyalty TV.
Paula: Capillary’s mission is to bring the loyalty market out of the 1980s and into the present, ditching the slow, chunky manual services of the past.
Paula: Capillary is all about making loyalty management easy, with scalable AI-powered tech that turns loyalty managers into superheroes.
Paula: Say goodbye to outdated methods and check out the exciting new way to achieve loyalty excellence in 2024.
Bill: Hello everyone, it’s Bill Hanifin.
Bill: I’m the managing editor of The Wise Marketer, and we are back for another episode of Wiser Loyalty, where each month, if you’ve been following us, we dig into one particular topic within our Loyalty Academy curriculum.
Bill: We go deep, we challenge some of the conventional thinking, and we talk about what the future might hold.
Bill: So this month, we are focused on our course number 109, which is Introduction to Loyalty Technologies.
Bill: And we’re at the end of the series for this month.
Bill: So Aaron and I, Aaron Dauphinee, our CMO, there he is.
Bill: Aaron, how are you?
Bill: Good.
Bill: I’m well.
Tim: Welcome.
Bill: We’ve been chatting through what the new MARTECH stack might look like for loyalty technology.
Bill: We’ve been talking about various considerations that you have to think about.
Bill: And we’ve got the ultimate capper for this discussion this month.
Bill: Because in this week’s episode, Bill and Aaron have invited a special guest.
Bill: And it’s Tim Murphy, who’s here to share his thoughts with us about what loyalty technology may look like in the near term, but also with an eye to what is just over the horizon.
Bill: And Tim is one of those people that has the ability to see around corners.
Bill: He’s been a C-suite executive at five Fortune 500 companies.
Bill: He served as CIO, CTO.
Bill: He’s held some very senior positions and has incredible insight into the future.
Bill: Tim, welcome.
Bill: How are you?
Tim: Welcome.
Tim: It’s a real privilege to be here, guys.
Tim: I’m really glad to be a part of this conversation.
Tim: I think it’s an important one and hope we are able to add some value for your listeners and connect the dots or at the very least provide some provocative questions that are sitting out there and that are unanswered that they’ll be able to help with.
Bill: Perfect.
Bill: I can’t wait to dig in.
Bill: So I’m going to let Aaron give you a proper introduction and then get our discussion kicked off.
Aaron: Yeah.
Aaron: Well, not to beat the drum too much, but I do think that we’re really fortunate to have you here, Tim.
Aaron: So thank you so much for joining us today.
Aaron: Not only do you have a frame of reference that’s really been rooted by many years as a technologist, to use a term that way loosely, but you’ve meshed it together with the nearly three decades of experience as really an innovator, a product builder, obviously a C-suite executive and advisor and board member.
Aaron: But for me, and this is a bit more personal because we’ve known each other for so many years, a mentor, and so I’m happy to have you facilitate some of the ideation around this particular topic.
Aaron: But for those who don’t know you as well as both Bill and I do, Tim’s pedigree in loyalty is only one aspect of his very decorated and very storied career.
Aaron: Whether it’s leading transformations at multinational financial credit and service providers, or if he’s developing tech and data enabled new product development portfolios, I’ve known him to lead corporate acquisitions for top 10 global marketing tech open source platforms, and then also be very entrepreneurial, co-founding a variety of businesses.
Aaron: There was certainly one around blockchain and enabled learning, all the way through to a nutraceutical product.
Aaron: So again, it’s a real privilege for us to have him here and carve out some of his time for us today and share his thoughts on the loyalty marketing industry from a technology frame of reference.
Aaron: So, Tim, maybe real quick, anything I missed out that our listeners should know before we dive in.
Tim: Thanks for your kind comments.
Tim: I would just say that I think folks that are in the loyalty space have a real opportunity coming and an opportunity for a 3.0 that is yet to be defined.
Aaron: Perfect, perfect.
Aaron: Well, that’s, I mean, we like definitions.
Aaron: Maybe I’ll hop in with the first question and then Bill will go back and forth.
Aaron: But we actually talk a lot about definitions and getting to kind of common industry vernacular jargon is where we kind of position our curriculum.
Aaron: And so when new technologies enter the market, we often hear a similar question that arises like, do we still need loyalty management, LMS systems?
Aaron: This new technology is going to replace LMS.
Aaron: The examples that we could think of mind are early CRM systems came first into existence.
Aaron: And then there was, oh, this will replace your LMS or more recently, the conversation around CDPs.
Aaron: And so the question to you, Tim, is, is the LMS the core to build from or do you see this shifting and changing at this point?
Tim: I think it’s a really important question.
Tim: The way I would approach it is, and I think my bias is always as a pluralist, I’m always looking for multiple points of view and different points of view when I approach these types of questions.
Tim: Because what I hear when someone asks a platform question or when they ask a standards question or a tech question is, I hear a leadership gap.
Tim: I hear a gap in the vision.
Tim: I hear a gap in where are we going?
Tim: And I hear it from typically the voices coming from someone who has a role that has to make things happen.
Tim: And they’re starting to feel that maybe there’s a gridlock in that, or there’s some friction in that in their day to day, or even there’s uncertainty in the sense of they don’t have enough clarity and enough vision from the senior folks around this.
Tim: And my characterization of where we are today in those questions is the problem statement, per se, is it’s not a we know what we know kind of a problem.
Tim: It’s not a we know what we don’t know, but it’s a don’t know what we don’t know kind of a problem.
Tim: And some of the characterizations there would be we have predictions of AI driving a 10X the commercial opportunity of cloud.
Tim: We have tokenization being forecast as a 15 to 20 trillion dollar impact in the next five years.
Tim: And we have board level conversations around winnable customer versus the old days of lift shift and retain at the AVP level or at the director level in organizations.
Tim: And there’s a real gap in the medium term agenda.
Tim: And so I would lay this one at the feet of senior management and say, these are symptomatic issues that are really coming to…
Tim: We don’t know exactly what we don’t know to be able to address them.
Tim: I guess a couple of other characterizations that I hear from people in the roles that are trying to figure this out.
Tim: You have AI enabled CRM, that is shared CRM, like Collective Eye is doing out of New York, building on the promise of early coalition or coalition loyalty.
Tim: You have CHATGTP, the blockbuster go to market that everyone talks about with a tokenized interface.
Tim: You have Salesforce announced in the last probably five or six weeks.
Tim: They’re going from seat pricing to usage pricing.
Tim: You have questions of not for profit versus for-profit branding for data stewardship.
Tim: Those are some really big characterizations when people are trying to say, so what’s my loyalty management’s, what investment should I be making in that?
Tim: What’s it got to do for me?
Tim: What’s the potential of it?
Tim: How do I maximize the value or the decisions that I’m making around that asset?
Bill: Tim, so just continuing on this, but to continue to clarify terms, I’ve heard so many characterizations of what the loyalty management systems, even how they’re constructed and what the go-to-market description is.
Bill: I’d love to get your take on this.
Bill: So I’ve heard a number of terms, microservices, not a loyalty term, but a technology term, but people are talking about, instead of going from large platform to large platform, maybe having to engage in that rip and replace type of exercise.
Bill: If you were to change providers, they’re saying, gosh, we’ve got microservices in quotes, and so that makes your life easier as a CTO.
Bill: Other people characterize that or describe it as modular technology.
Bill: Interesting term.
Bill: Then I’ve also heard people talk about, we have headless tech, and headless tech sounds like a term that was born probably in the IT area that somehow the marketer’s got ahold of it.
Bill: I’m not sure it really communicates anything.
Bill: But how would you describe where we are today in terms of the market even wanting to have and comprehensive solution versus saying, we’ve got what we’ve got, now we’re interested in one of those other three terms, microservices, the API driven, all of that.
Tim: Well, to address the specifics of those terms, they’re all expressions of how the technology stack is organized and they’re looking, and each one of them has an impact on the rigidity versus the flexibility, the interdependence versus the independence, these kinds of architectural qualities, and those kinds of qualities can be applied to how an organization is structured, how someone’s role is structured, how their work is structured, how a platform is structured.
Tim: So the nuance of those is in, I like the nuance of those types of characterizations because they help to be able to understand in real language what the potential is or what the qualitative aspects are of the system.
Tim: But if I then step back, loyalty as a rigid system, doesn’t make sense to me today because it is cross-functional, it’s cross-discipline, it’s touching the balance sheet in terms of intangible assets which we all know of in the last 50 years.
Tim: If you pull the camera way back, we were 80 percent tangible assets in corporations 50 years ago, and 10 to 20 percent intangible assets.
Tim: Today, that’s flipped if not even a 90-10 or a 95-5 in favor of intangible assets.
Tim: You have this concept through loyalty of the tokenization of the customer experience, of the type of innovation, all these aspects, and you can’t implement it from a single ERP system.
Tim: We now have the proof that that hasn’t worked.
Tim: I’m not trying to sidestep the idea of digging in on microservices other than to say when that question is being asked, what’s the broader context again becomes the theme that I think is important.
Tim: The implication is that the type of systems we’re talking about are changing where the decision is made.
Tim: Five, 10 years ago, the decision might have been made at the director level in the organization around a static segmentation or a micro-segmentation that was going to then drive a series of experiences, or a series of pricing adaptation or category management strategies in tangible terms in the next budget.
Tim: But today, we have board level conversations about, I don’t know where my next growth is going to come from.
Tim: Where’s my winnable customer?
Tim: What is the definition of a winnable customer that I’m not focused on today because I don’t know how to help to allocate resources to be able to go after those issues.
Tim: The potential of the technology is great with micro-services and these kinds of flexibility attributes.
Tim: They create a realm of potential, but without a compass heading that helps to address some of those macro complex issues, it’s very difficult to go after.
Tim: I would argue in today’s world, we’re dealing with a polarization environment where we have issues that are very big swings from macro to micro level or global to local issues.
Tim: We’ve just seen that in, you could argue we’ve seen that in sport in the last little while with individuals taking on bigger brands than the actual teams and leagues.
Tim: You could say we saw that in the election with a very polarized environment, but a pluralist kind of a view or a populist movement that came out.
Tim: And you could argue that we’ve seen that same thing even in the way social media started to evolve as a complex platform that loyalty needs to take into consideration.
Tim: So when you come back to that, the potential of the technology is great, but the overarching questions are at the feet of a medium-term agenda that senior management doesn’t have their head around right now and is not articulating clearly enough for the folks that are being tasked with getting the growth and getting the tangible outcomes to be able to address.
Tim: So it’s like we’re having the wrong definitions.
Tim: We’re talking about the wrong end of the stick to be able to then inform those aspects.
Aaron: So let me pick up on something you just talked about there because if it’s at the foot of the leadership and they’re not asking the right questions or not giving the accountability to the right level, you also said in just your comments there around the idea of it’s too all encompassing, you can’t have it all in one system.
Aaron: Well, that’s our origin story in loyalty marketing.
Aaron: Twenty, thirty years ago, it was really, we had to build it mentality.
Aaron: We’ve evolved now to these multiple sources of data and their integration into a system that has this very fulsome view of your customer.
Aaron: But do you see that build it mentality remaining prominent?
Aaron: Can it even stay at this point, or are we shifting much more to this modular loyalty martechs type of stack as a path forward, and I’m going to guess if it’s the latter, that’s the one that’s going to win, or is there a place for both at this point?
Aaron: We hear mixed stories about in the market of a number of companies that are still building in-house, as opposed to going and kind of plug and playing to some degree.
Aaron: So I’d be curious, take away the, we know that there’s a bigger, larger question in terms of, you know, senior management has to act upon, but when they do get into the how, you know, is it by-build mentality or is it plug and play?
Aaron: Where do you see that?
Tim: I think it’s a really great characterization of the decision environment that people have constructed today, you know, and to your point, if we turn the clock back a couple of decades, it was build it.
Tim: But if you think about the problem statement at the time, it was largely transactional data.
Tim: It was piggybacking on a, you know, capturing a point at the point of sale, you know, at the point of purchase, not the whole customer experience.
Tim: We didn’t understand a lot of the other elements that were going into that, certainly not from a data-driven perspective, as was the promise of the day.
Tim: And the complexity of those systems ended up, you know, imploding on themselves in a way because they never got past that transactional reference point.
Tim: So, the issue around build is that it always starts out with an oversimplified view of what the ecosystem is.
Tim: And as the potential of loyalty and its promise, you know, got more holistic and attached itself to a broader view of customer and, you know, multi-channel, multi-modal, multi pricing strategies, high-low pricing strategies coming out of, you know, grocery and health and beauty and those kinds of things.
Tim: The complexity of all those dynamics, I think has gotten to where the answer isn’t to pick one or the other.
Tim: It has to be something that starts with a view of what phase are we at?
Tim: What do we want to accomplish?
Tim: What’s the life cycle of these investments we’re making?
Tim: And how do we look at that so that we can be far more agile than what we had to be in the past?
Tim: And so I think that becomes a…
Tim: It becomes an elevation of the conversation that middle management needs to participate in.
Tim: And it becomes a real change in the scope.
Tim: If I think about under 30s right now, people that are coming into their management roles, first management roles, those kinds of things, they’ve already grown up with social media and an expectation of multiple views in a scrolling capacity.
Tim: They’ve already come up with access to information that we didn’t have at the same stage.
Tim: So pluralism for them is a foundation for authenticity.
Tim: If senior management isn’t addressing the complexity of those issues, they’re not going to be engaged in what everyone wants to be a tangible outcome or a no regrets move.
Tim: And the essence of that is, there were no regrets moves 25 years ago that you could weigh the factors and the problems were discreet enough to go after, but that’s not working in the innovation space anymore and that’s not working with the kind of technology that has evolved in the interim.
Tim: So, what’s an outcome in that?
Tim: I’ll just highlight, we have a polarisation or a paradoxical environment.
Tim: You have a need for build it and build quickly and try out and trial and exploration and those aspects at one end of the spectrum and at the other end of the spectrum, you have to have an eye for what a scale-up looks like, what repeatability looks like, what the bigger investments look like, and there’s not a lot of space in that middle at the moment because we don’t focus on the medium term, which is where that’s the domain of the medium term.
Tim: So, I would argue, Aaron, that there’s a need to look at short-term, medium-term and longer-term in the way we tackle those decisions now that was not there in the past.
Bill: Tim, talking about time frames, something like the changes we’re seeing right now coming along.
Bill: Everybody is quick to try to seek adoption and pass forward, but then you’ve got this thing called tech debt because there’s already a massive amount of projects that are underway.
Bill: So, if you were at a brand and you’re responsible for the customer strategy overall, what do you think the right time frame for change should be?
Bill: Or should you be trying to maybe just maintain what you’re doing very well, optimize that and think more in terms of like a three to four year time frame?
Bill: What’s the right horizon that the executive should be focused on?
Tim: I think the way I would characterize it is coming out of looking at the type of innovation that we need to be taking risks with now.
Tim: In the past, the technology is often started by saying the risks are all about the functional scope of the platform.
Tim: This is what it does and this is how it does it.
Tim: These are the constraints and these are the procedures and these are the processes that we’re going to repeat and so on.
Tim: With the implementation of AI and the Web 3 ideas and even blockchain, the type of programming allows you to get into market much faster and test those things out with a much lesser re-enforcement of, you know, tried-and-true processes, procedures, and the procedural economy is largely going to evaporate in the next while whole industries are being transformed in 12 to or 6 to 12 to 18 month periods and we haven’t seen the fallout yet.
Tim: So part of the domain of answering your question is what are the macro factors in my industry and the likelihood is that we need to adopt a mindset that is about trial and that is about taking risks and those risks are almost always, as I’m seeing it, are much more quickly getting to what are the customer experience innovations, what are the experiential innovations.
Tim: Those are the ones that are largely beyond the Gartner hype cycle.
Tim: So looking at the technology in those kinds of functional domain terms is not that useful.
Tim: It’s going to be cultural factors, decision complexity, information quality.
Tim: Those are the resource and the strategy drivers.
Tim: So then the question comes back in those and it says, I need to know what my macro or what my enterprise level view of a strategy is, and I need to meet the outside environment somewhere on a growth trajectory in five years time where I have a much broader context for how I need to present these decisions and help my senior management to be able to make the check marks pass the decisions, create the alignment that allows me to take risks.
Tim: So my overall is it’s a time for taking risks.
Tim: The risks are predominantly going to be about customer experience and about a winnable customer, meaning one we probably don’t serve today in many, many industries.
Tim: And those become the work back from those kinds of hypotheses or heuristics and patterns.
Tim: It’s not going to be bottom up.
Tim: It’s going to have to be top down with the kind of things that are happening today.
Tim: Otherwise, it’s going to feel like chaos and people are, you know, projects and work that happens on that basis are burning out.
Tim: You know, the human factor is real in that.
Aaron: Tim, that’s, I mean, all of this conversation is fantastic.
Aaron: And we really do appreciate you taking your time.
Aaron: I know we’ve kind of got to watch our time here as we lapse up.
Aaron: But one of the last questions I wanted to ask you, but I think you’ve actually answered it.
Aaron: So I don’t know if we need to dive into it.
Aaron: You talked about, you know, you don’t know what you don’t know type of problems that you’d like to solve for.
Aaron: I think you gave us a lot of things that we didn’t know that we now know.
Aaron: So I wanted to thank you for that.
Aaron: But is there any last kind of thoughts that you want to real quickly sum up in terms of things that people should be thinking about?
Tim: Well, I’d be happy to come back and chat about this topic, because I think it’s a very important one broadly.
Tim: And places where I’d like to go going forward, what can we learn from the past?
Tim: And how can we take the patterns of the past, which are always only maybe 25% of the big picture, but how can we use those as a part of the foundation, not throw the baby out with the bathwater in essence?
Tim: And how can we look at what comes next and the creativity of what comes next and create an environment where that creative aspect is, and the visionary aspect that goes with that is something that we embrace more broadly.
Tim: But I’ll leave you with an example of that just as a moment.
Tim: And the US election is probably a visible reference point for almost everyone today.
Tim: When I looked at the results of what was happening in that, and I don’t have a horse in the race, I put my head down at night in Canada, so I’m not in the United States and I didn’t vote.
Tim: But when I looked at that, what I did was I went to chat GDP and I said, tell me where there’s the potential of a president having a term, missing a term and coming back.
Tim: And it turned out that there’s only one of those.
Tim: It was in the period around in the late 1880s and into the early 1890s.
Tim: The president was Cleveland.
Tim: Okay.
Tim: And if you look at the macro issues and the populist movement and the nature of the issues, 125 years out of date, the prediction was there for all of the aspects of that election and how the overall social context was going to move forward.
Tim: It wouldn’t have predicted the election results.
Tim: It wouldn’t have predicted the exact results.
Tim: But it explains the things and the sentiment that was there.
Tim: And I think we need to go after sentiment analysis and see that kind of extension to heuristics patterns and anthropology, if you will, as a part of what we can talk about rather than the last generation missed it.
Aaron: That’s awesome and ties so much for us as we start to think about moving out of the programmatic L of loyalty and into this higher big L loyalty construct around customer centricity that we harbor on many degrees at the Wise Marketer.
Aaron: But Bill, why don’t you take us home in terms of things to wrap up today?
Bill: Absolutely.
Bill: So again, thank you, Tim.
Bill: Thank you so much for just giving us the time and giving us some of that wisdom.
Bill: We will bring you back.
Bill: You can count on that.
Bill: So for everybody that’s been joining and sort of tracking along with us this month, we always want to give you the opportunity to join in the community of Loyalty Marketing professionals that we’ve developed at the Loyalty Academy.
Bill: We’ve reached a few tracks over our news, over 1,000 people in 55 countries, just in the last couple of weeks.
Bill: If you’d like to become part of it, have access to more of these kinds of conversations and really to be part of what I would call the leading edge of this industry, then please do join us and you can find more information at loyaltyacademy.org.
Bill: If you want to dig into previous podcasts, you can find them at the Wiser Loyalty Podcast Series, find them at wisemarketer.com.
Bill: If you subscribe to our newsletter, you’ll see highlights and it’ll be pushed out to you so you can easily access it.
Bill: So with all of that, we wish you all a great day, a great week.
Bill: Look forward to having you back here again and as always stay loyal.
Paula: Thank you so much for listening to this episode of Let’s Talk Loyalty. If you’d like us to send you the latest shows each week, simply sign up for the Let’s Talk Loyalty newsletter on letstalkloyalty.com. And we’ll send our best episodes straight to your inbox. And don’t forget that you can follow Let’s Talk Loyalty on any of your favorite podcast platforms. And of course, we’d love for you to share your feedback and reviews. Thanks again for supporting the show.
