February 26, 2014 | Written by: Gunnar Pietrass
Categorized: IT Infrastructure and Analytics
The history of marketing, like the history of technology, is defined by significant time periods or eras. Furthermore, most if not all of these marketing eras were preceded and enabled by foundational technologies. The era we are now entering — what you could call the era of loyalty marketing — also requires its foundational technologies. Those are the cloud, cognitive computing (think Watson) and in-memory big data crunching (think HANA).If you don’t believe the combination of these three technologies is a marriage made for marketing, you need only look at this month’s announcement of the New York City based Watson Business Group. Where else would you base a business whose commercial success depends on building consumer loyalty through enhanced real time customer engagement?History Repeating Itself
This is a pattern we’ve seen before. Whenever there’s a new wave of technology, a new wave of marketing will follow soon after.
The mass media era, obviously, could not have occurred without mass media — radio and TV in particular. Similarly, the current era of Internet marketing — also known as digital marketing, content marketing, inbound marketing and by a few other names — would not be possible without the Internet, browsers, HTML, XML, search engines, and content management systems. The cloud, cognitive computing and big data crunching, especially in combination, are no less disruptive than these other technologies. So, we should expect a no less disruptive marketing shift to follow. And that’s indeed the case with loyalty marketing.
Loyalty Marketing Redefined
What is loyalty marketing and how is it different from previous marketing eras? First, let’s be clear that loyalty marketing is not to be confused with conventional loyalty programs like frequent flyer programs or members-only stores like BJ’s Wholesale Club. It’s much bigger than that. Loyalty marketing, as it is about to become widely practiced, is where you deliver a real-time customer experience that is fine-tuned to the individual customer via mobile apps and the web. It’s called “loyalty” marketing because primary result of that experience is not just that it sells more products (which it most certainly does) but that it engenders the customer’s loyalty with whatever business is creating that experience.
Based on the principle that you have to give in order to get, this new marketing creates customer loyalty to the retailer by the retailer showing loyalty to the customer — by respecting each customer’s personal individually — such as by providing product promotions and information tailored to what that customer actually wants and cares about. Offers and other content reflect the customer’s current location (like in the store or even a particular store aisle), previous purchases, what they and their friends are saying on social media, the types of items that typically get bought together, and other data. Offers also reflect business rules such as the level of discounts permitted after an item has been in inventory for a certain length of time.
Hence the need for cognitive computing and lots of real-time big data number crunching.
Watson meets HANA
Just like previous eras, loyalty marketing would not have happened were it not for the arrival of a group of enabling technologies. Cognitive computing enables very rapid and extremely intuitive suggestions about what the customer is likely to want and enjoy. HANA-style big data processing enables all the variables involved in these decisions to be available in-memory at the same time. Cloud computing is also an enabling technology because it makes the required technology intensive infrastructure massively scalable and therefore cost-effectively available for the individual marketer to employ.
And also like its predecessors, loyalty marketing is game changing. It sets a new standard for how retailers and other types of businesses interact with customers. Within the next few years, we can expect customers to become accustomed to this level of loyalty from the companies with which they do business. We can also expect the launching of many new businesses, and new business models, that take advantage of this new kind of customer engagement. That is what happened when previous marketing eras first came on the scene. And it is no doubt why IBM set up its new Watson Business Group in the heart of New York City.
Further Information check out these You Tube Video: http://bit.ly/1gfecwl and some additional reading about this Topic – http://ibm.co/1ge5NsN