Can your software do this?
Here at TRIFFT, this question frequents our conversations with both current and prospective customers. The landscape of software solutions often presents well-defined feature expectations, however, when it comes to Marketing Technology (MarTech), the lines between functionalities tend to blur, making it a nuanced discussion regarding what a particular solution “should” encompass.
Over the past decade, the proliferation of software tools aimed at helping companies attract, engage, retain, and monetize customers has witnessed a competitive differentiation in the scope of offerings. The MarTech spectrum ranges from comprehensive “do-it-all” platforms to tools specialized to excel in executing specific tasks.
Cornerstones of Customer Engagement Tech
In the arena of marketing technology, CMOs typically have defined “jobs to get done”: understanding and engaging web traffic, crafting rich single customer profiles from social, CRM, and other sources, orchestrating engaging and relevant personalised outbound communication, delivering exemplary customer support, and managing social networks along with customer sentiments.
The key to success? It’s crucial to map out these jobs (of the marketing team) to the corresponding facets of the MarTech landscape. An important step in this process is identifying a cornerstone technology—a central solution with a broad scope—that will serve as the daily go-to platform for marketing managers, providing a hub to which other marketing solutions can seamlessly attach.
Currently, Customer Data Platforms (CDPs) fulfill this cornerstone role. However, we argue that Loyalty Technology, or Loyalty Platforms, emerge as a second cornerstone, especially for organizations keen on nurturing customer loyalty. Each platform has its distinct scope, and when synergistically integrated, they amplify each other, covering a comprehensive breadth of the MarTech landscape.
Scope of Customer Data Platforms and Loyalty Platforms
From a practical standpoint, CDPs are instrumental in aggregating customer data to create a holistic 360-degree customer profile, enabling automated segmented & personalized campaigns aligned with business objectives (typically driving sales), and fostering a data-driven culture through real-time, insightful analytics.
Specifically, the core functionalities of a CDP include:
- Aggregating customer data from diverse sources
- Storing customer data in a real-time accessible database, usually “in-memory”
- Orchestrating marketing “scenarios” with defined triggers, decision-making based on manually set (or AI-driven) rules, and “output nodes” to interact with customers, such as sending emails or displaying custom web content
- Offering real-time analytics of customer behavior to inform marketers about current performance and generate actionable insights for improvement
While the focus on customer-centric data is irreplaceable, not all necessary data, like coupon codes, point accounting, content management, and customer support tickets, are customer-centric, and therefore, aren’t well-accommodated by CDPs.
This paves the way for the relevance of loyalty technology.
Scope of Loyalty Software
Loyalty technology encompasses all elements essential for delivering a customer loyalty program. Beyond the physical “Channels” like mobile apps, plastic cards, or web microsites, it’s crucial to consider the daily operational needs of loyalty marketers such as crafting segmented offers, integrating with POS systems, managing partner coupon codes, providing membership support, and orchestrating gamified contests among others.
Listing some key components, loyalty software should:
- Integrate with ERP/POS systems to capture transactional data and provide reward data for each loyalty account
- Support standard loyalty mechanisms like earn & burn, random wins, tiers, etc.
- Manage account agendas including creation, deletion, and CRM data edits
- Handle consents (agenda around Terms and Privacy policy)
- Collect zero-party data (stated customer preferences) and first-party data (customer behaviour)
- Administer loyalty program content (e.g., loyalty news, coupon and reward graphics and copy, etc.)
- Facilitate working with customer segments
The data spectrum in loyalty tech is broader compared to CDP, encompassing CRM components and data structures for rewards, coupons, venue lists, and content.
Two is Better than One: The Symbiosis
Our experience reveals that a significant majority of large retail organizations operating loyalty programs maintain dedicated CDP and loyalty tech solutions. While we haven’t come across a CDP adept at managing the loyalty agenda, some loyalty tech solutions can cover a subset CDP functionalities (segmentation, scenarios, analytics). However, a robust CDP executes these and other tasks more efficiently.
Action Plan:
Determining whether to invest in a Customer Data Platform (CDP), loyalty technology, or both, hinges on your organization’s domain, operational model, and marketing aspirations. Here’s a clear breakdown to help you decide the sequence of acquiring these technologies:
Invest in Both CDP and Loyalty Tech if you:
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- Operate within the mid-market or enterprise domain, notably with a growing network exceeding 50 stores, 100,000 loyalty members, and 5 marketing managers.
- Are tech-savvy or aim to stay ahead with modern marketing practices.
- Can generate a positive ROI on a combined monthly investment starting at $5k.
Start with Loyalty Tech if you:
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- Operate primarily in the brick & mortar space and have frequent real-world interactions with customers.
- Aim to focus on customer retention.
- Lack the resources to support multiple scenarios and segments with dedicated content.
Start with a CDP if you:
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- Are a pure eCommerce player.
- Rely heavily on traffic generation and conversion to purchase.
- Have access to a wide range of customer data sources and aim to execute 1:1 marketing across various channels like email, website, social media, etc.
Final Thoughts
- Both CDP and Loyalty tech are significant investments and challenging to replace. Choose wisely ensuring compatibility.
- Opt for solutions with robust REST APIs / webhook connection capabilities, simplifying integrations between CDP, Loyalty tech, and other solutions.
- Select technology that your team will enjoy working with. Given the substantial time spent interacting with these platforms, prioritize cloud-first, UI-centric solutions to foster a productive and enjoyable work environment.
Do you want to create awesome loyalty experiences?
Get in touch with TRIFFT Loyalty Cloud!
