Bill: Welcome, everyone. I’m Bill Hanifin. I’m the managing editor of The Wise Marketer. And I’m here with Aaron Dauphinee, who’s CMO of The Wise Marketer Group. Aaron, how are you?
Aaron: I’m doing well, Bill. How are you this week?
Bill: Good. Doing great. You know what? I love these Wiser Loyalty podcasts that we’re doing in conjunction with Let’s Talk Loyalty. This has been a great series all year. We’re going to finish strong these next two months. So we’ve got two really good topics for the balance of the year. And in November, we’re talking about what’s trending in loyalty tech. So if you’re not familiar with the series, let me just tell you, every month, Aaron and I have been selecting a topic based on some curriculum in our Loyalty Academy Curriculum, which is a composition of courses that leads to the Certified Loyalty Marketing Professional designation. We, by the way, just crossed the threshold and have over 1,000 people globally, I think in 54 countries that have earned that designation. So very significant group of people that are enjoying the content and have made the commitment to be part of the community. So big benchmark there. We’re grateful to Let’s Talk Loyalty to Paul Thomas for having facilitated these conversations. So let’s dig in to this topic this month. We were basing the content that we’re going to talk about over the next four episodes on our Loyalty Academy course number 109, which is focused on loyalty technologies. If you were to hear that course right now, you’ll say, gosh, a lot of things have changed. And so that’s what we’re going to talk about, is how much things have changed. And we’re going to talk a lot about the multitude of advancing and innovative technologies that enable loyalty marketers to drive consumer behaviors, to drive insights, to influence customer interactions and experiences. There’s so much happening right now. There’s so many new concepts. And some might, Aaron might say, are shining balls. Some might say that they’re shiny, but they have substance. So we’re going to go through and talk about some different technologies that are there. But Aaron, why don’t you get us started on this today?
Aaron: Yeah, this is a topic that could go in multiple ways, right? Like there’s just so many different ways that we could tackle this. So we’ll try to distill it down in an episode here to give you the high overview and then also dive into a couple of the topics in a little more detail. But when we think about technologies that are really impactful to us as Loyalty Marketers, it’s, as you pointed out, Bill, very easy to jump to the new shiny balls that are there because they’re top of mind and have most interest to us, typically. And we forget the legacy systems and the rudimentary elements that really enable or the baseline foundation elements, I should say is probably a better term, that enable our ability to be able to catch and capture and do things with our customer base, that others who don’t have a loyalty mechanism in place cannot do. And so, there’s a long list of technologies really that intersect, as I said, with our ability to do things for and with our customers. And if I was to rattle off a list of that, and this is not an all-encompassing list, but just the top line, as I just kind of talked about, the basics of the capture and catching capture points offer systems that are connected to POS or to online systems that allow you to really operate at a rudimentary level based loyalty program. There’s a starting point and then they get more sophisticated going from there. There’s certainly technologies that focus on omni-channel loyalty experiences, so connecting the different points of contact and interaction that your customer has depending upon how you’re selling your products and services to them. There’s of course, technologies that focus on real-time and also dynamic data analytics, bringing that into dynamic segmentation that really focuses on with the here and now in this moment versus a set and forget type of analytical aptitude and then that opens up a whole basket of other software like if we extend into the shiny ball stuff of AI and machine learning driven systems and software solutions, that would be on the list as well too. Connected to that of course is mobile apps and social integrations. You think about user generated content, feedback mechanisms, all of these have our tech solutions that come together to create a cohesive view of the customer. Then an area that you’re very strong in of course, payments and wallet integration. Whether it’s multi-tender solution to enable a program to just collect cash versus credit versus debit versus other, or if it’s as sophisticated as paying with your points type thing. Then of course, the things that aren’t shiny balls, but we are incredibly important to us and as loyalty marketers in terms of creating trust, fraud security, privacy protection technologies, and then other shiny balls to rattle off a bit more on the list. Blockchain and tokenization, augmented reality and virtual reality are a bit more further out there. I don’t think they’re right. They’re dipping the toes in at this point, but at this point, I think that is a good list of the things that are just the starting point, scratching the surface, if you will, around technologies that are related to loyalty marketers. I think, as I said at the onset, there’s way more here than we can cover in one episode, but perhaps if you and I just go back and forth and take a couple that are of most interest to us and talk about them today. Bill, which loyalty tech gets you excited about moving our industry forward, I guess is how I’ll phrase it.
Bill: Okay. Yeah, I’ll choose one and I’ll tell you. Just note to listeners, what we’re talking about here today really are feature functionality, like where’s the emphasis on what we’re delivering with technology. We’re going to talk about loyalty architecture in a later episode. We’re going to dig deeper on the first of the topics, which is AI that I’m going to grab onto in a second. Then we’re going to also talk about the future and get some perspectives on where this business is headed. We might bring in another person for an interview at that point in time. To kick it off, I think, I don’t know, it just seems like AI and machine learning is top of mind. If you look at The Wise Marketer over the last six months even, or just 2024, the number of articles we published, and we’ve been ingesting articles and viewpoints from a lot of different people because we want to hear all the different perspectives out there. There are two areas, I guess, it’s where I think AI is really having impact on our business, and one of them was in customer service. When you think about chatbots, virtual assistants, that seemed to be the most obvious and most easily to implement type solution for AI. Conversational commerce was something that I remember Barry Kirk talking about back in the Merits days. It’s probably been about five years ago, but the whole idea of a more informed, more capable, more flexible and adaptable chatbot that you could have a conversation with. At what point, you know how the early chatbots were, it may have given you a list of questions and you were restricted to asking questions based on the categories that are presented to you, and then a little bit later, it said, just go ahead and ask me a question, but you could tell by the way the response was that you just went out of balance on me and so I don’t really know, I’m just going to give you this generic answer. So I think we’re seeing AI take hold, and I think we’re maybe 20 percent of the way on this journey, I think, because it will get to the point where instead of me flipping over to the live chat, the AI-powered assistant will be able to have a really rich, wholesome type of conversation, and that’s certainly in the future. So we’re on the path there, we see it implemented, it’s saving costs, and human resource costs in a great way for a lot of brands right now. So we see that happening. The predictive side of this is personalization, and that’s where we see all the excitement. I think that one is the more perfunctory, like, yeah, we’re doing this, we’re saving money. The promise, the excitement, the build for the future is on what we’re talking about hyper personalization at scale. That’s a big lofty mouthful that makes for a good keynote presentation. But what does it really mean? It means that we can process through information and make decisions much more closer to real time and be able to deliver offers to people when it matters. Like when I’m sitting there and I’m actually pivoting there, I’m on the fence and I’m trying to make a decision and I get a message, and it’s the thing that shifts me to make a decision. It doesn’t mean I shift from brand to brand, it might be between two products or it might be buying the larger version of a product instead of the smaller one. But whatever the intended behavior shift is, AI right now has the ability to manipulate the data to the extent that it can influence our decisions and also it can be much more in the moment closer to the point of purchase. I think that’s almost a layman type description of the lofty detailed descriptions of hyper-personalization and scale. But that’s what it means to me is that what we used to talk about as real-time loyalty was kind of a dream back some years ago. Now, it’s going to be delivered and it’ll be delivered more and more. We’re just going to see iterations of it where it becomes more capably executed, better done. We’ll see it in our own lives as consumers as well as professionals.
Aaron: I think there’s a lot of blur in terms of the one area that I wanted to talk about when you talk about AI, machine learning and personalization through to real-time data analytics and dynamic analytics. That to me gets excited. That’s the heritage of where I’ve grown up in the shops that I’ve been a part of in loyalty over the past 25 years. You’re absolutely right. If we talk about real-time offers and insights, they’re now able to be delivered in some form and fashion. And the next lever to that is actually getting to that hyper personalization or even just personalization. I know I always go back to those two things sometimes get overused already. Even hyper personalization is already being overused in an extent of personalization. But for me, it really comes down to if you’re doing the data analytics correctly and you’re able to distill down to a cohort that’s a lookalike of a particular customer, or is actually relevant to the particular customer because they’ve given you some preferential data or zero party data that you’re mirroring on to your first party data to get a really astute view of this particular customer and what their needs are and how you can solve it for them as a brand, then that ability to do that in the moment is becoming increasingly a customer expectation. And so you have to have a rigorous analytical capability and the technology to be able to support that, to be able to take in the data, digest it, crunch it down, make sure it’s cleansed and it’s good data in so that you have good data out as the old adage goes. And from there, be able to compute and provide offers and insights and or content, just even content is sometimes to have relevancy, not let alone something that’s inducing a behavioral change per se, but it’s about education. That then allows for some element of benefit to that particular customer and then extend that into, whether it’s about rewarded issuance and target offers or changing customer behavior all the way through to just being able to help a particular customer through a customer service interaction like you’re talking about with the AI virtual chatbots. All of that comes down to being able to take the data that you have on the customer and distill it down to what’s relevant, what’s purposeful, what’s meaningful to solving for their needs and providing a benefit to them as a whole. That’s the start for just the real-time aspect. AI is a certainly component of that with machine learning, being able to help us to do a lot of segmentation in real-time, adjusting the loyalty centers dynamically based on people’s activity and engagement. All that is merged together and going to become increasingly faster, quicker, and more accurate as over time we utilize AI in a way, both AI and machine learning in a way, that helps us to be more sophisticated in our outputs of the analytics that we have. And then I think last of course is, of course, we always talk about behavioral and predictive analytics, taking the transactional data that we have and assessing the behaviors and patterns to predict those trends out, but basically allowing brands to better forecast for their customer needs and anticipate the loyalty incentives that they most want and desire. So, I mean, those two kind of flow together in terms of the technology that comes together and sophisticated, and we can give more examples later on, but what’s another topic that you think is interesting where loyalty tech is driving sophistication of us as loyalty marketers to provide value for our customers?
Bill: Maybe it’s in the integration side, the integration with mobile apps and digital wallets, because when you think about the channel, how many years ago was it when we reached the tipping point where the mobile devices became the primary screen for most customers to collect their e-mails to talk to brands, and to go shopping effectively? We’ve seen an explosion of mobile app developers, and I think there’s an independent group of those that exist, that are doing a great job. There’s also now, and this is what we’ll talk about in architecture, there are many more of the full service providers that are able to develop a fully integrated mobile app from the get-go. They don’t necessarily have to relegate a brand to go to a third-party developer, but they’re pros and cons of each approach. But either way, I think if you have a loyalty software, it has to be, through APIs or some other way, able to easily integrate into the mobile app so that the mobile app can not just do the perfunctory reporting, but it can actually deliver a better experience while you’re shopping. So that’s number one. The other one is on, it’s interesting, I saw something that the Apple Wallet has been in the market for, I’m going to say the wrong number, but it’s like 20 years. I mean, it was, and I’ll get this for the next episode, but it’s been there for a while, Google Wallet has been there for a while. They’re both reintroducing their wallets as if they’re new, and a big feature, what they’re leading with on the messaging is, you’re going to be able to put your loyalty cards in those wallets, and you’re going to be able to not only present it and pay at the point of sale, but you’re going to be able to be recognized as a loyalty program member and get the credit that you deserve.
Aaron: Wow, an epiphany. They’re having an epiphany moment from over a minute.
Bill: It’s some of the things that a lot of the people in this call listening have been saying like, I’ve been recommending people to do that forever. Well, it’s happening right now, so we’ll come back to it more in a future episode, but those two things are important.
Aaron: Yeah, 100 percent. Extending on that, what’s old is new type of mentality. Certainly, social programs and user-generated content has been around for a while. We haven’t, as ultimarketers, really enabled the technology to grasp it and integrate it into our sophistication of the analytics that we’re doing, until more recently. Finally, now, we’re starting to get and understand on social movements, the ways in which referral and advocacy incentives can start to basically modernize our ultisystems, if you will. That’s a good way to describe it, is to bring it up to speed in terms of where the points of interactions and what influences our behavior, right? Because it’s not just always an offer or a structure or even education. It’s sometimes about status and whom we hang out with and that, you know, the old adage of I want to be like someone else, whether it’s a superstar or another friend within my friend group, and who influences us. You know, we go back to word of mouth marketing has been longstanding, the holy truth in terms of being able to influence people. Now we have a digitized version of doing that in the social media platforms that we engage in. And so, you know, this idea of bringing those technologies from social into our sophistication of loyalty mechanics and understanding how we can induce behaviors through referral, as I said, or even when people have advocacy for your brand. Like, I always go back to the old adage of sometimes someone who’s talking about my brand is more valuable to me than someone who’s only buying on the long tail and only a couple of things, and I keep throwing money at them, but they’re not going to ever rise higher in terms of overall spend. At that point, I have to trade off against someone who’s not maybe spending with me at all, but man, they talk about my brand a lot because it’s an aspirational brand, and it’s really good for me as an overall. How do I put a score mechanism against them and understand that? And this is stuff we’ve talked about again for a number of years, but only more recently has the technology been able to now start to integrate this and put it into our loyalty systems where we’re able to actually understand the value of someone who just talks about us versus someone who actually spends with us. So I think that’s probably the fourth kind of bucket of fun stuff that we talk about. And I know there’s a multitude of others that I listed at the onset, but maybe in the interest of time, bring us home for this week’s episode, Bill.
Bill: Yeah, we’ll do that. And we’ll have in the show notes in episodes throughout the month, we’ll put in the entire list. And so you can remember because we only have time to talk about a few of them, like Aaron said. So to me, the overall trend of digital transformation for many brands is what’s leading the shift towards data-driven customer-centric loyalty systems that are going to have to prioritize personalization, become more flexible, provide that relevancy, and really go to market with an experience-first approach. So we’re going to dive deeper, like Aaron said, into that initial list that he shared with everybody. We’ll put some show notes in where we just can’t get to it all, and that’ll all be contained in the next three episodes over the course of this month. But for now, let’s wrap it up. Let’s thank everybody for listening. And Aaron, why don’t you bring us home?
Aaron: Yeah, I mean, I think you covered off a lot of it at the onset. You know, for those of you who are interested in joining our community of Loyalty Marketing Professionals, you can always learn more at theloyaltyacademy.org about how to earn your designation and join the thousand plus the CMPs that we have, as Bill alluded to at the beginning. We just passed that milestone literally last week. So we’re really excited about that. So this is very fresh in terms of us coming over that bridge. But also if you wanted to find more information around the other episodes that we have, you can always go to the wisermarketer.com and get those episodes there. Or you can go to letstalkloyalty.com and click on the episodes through that medium as well too. So as always, stay loyal. We’ll talk soon.
Bill: All right. Thanks, everyone.
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