While riding on one of Toronto's railcars, we discussed the reasons why loyalty marketing technology continues to evolve.
Loyalty Strategy

New Reality for Martech and Loyalty: An Interview With Scott MacDonald

Photo by Marcin Skalij on Unsplash

The Martech field is changing rapidly. The concept of a Loyalty Marketing System is defined differently in 2022 than in the past. Marketers are on the cusp of being able to fulfill the promise of personalization built on the massive stores of data collected about their customers and loyalty program members, but how close is this reality? We interviewed Scott MacDonald, Vice President Product & Marketing with Exchange Solutions, to gain an understanding of how loyalty marketing software is changing, and to learn what retailers and others are seeking from their providers.

By: Scott MacDonald, Exchange Solutions

In our opinion, Scott is a unicorn in the Martech world. While he has full understanding of system architecture and capably directs product management teams, Scott is able to translate the big picture benefits of the tools and services developed by Exchange Solutions in language that any of his clients can understand. Input all the “geek” that you want into Scott’s ears. He will process the input and explain it back to you in plain English. That is a skill you don’t always see on display — and one that clients relish.

Scott has been in the Martech space for over 15 years, much of that time spent with Exchange Solutions, a SaaS marketing technology company delivering loyalty and personalized offer solutions to businesses that seek to make closer connections with their customers and grow value in those relationships. His work experience encompasses leadership roles within account management, technical sales, marketing, product marketing, and product management.

Ask him to describe a “day in the life” and Scott will tell you that he spends much of his time thinking about the needs and challenges of retailers today, hoping to zero in on product designs that will meet the current and future needs of global organizations. Scott didn’t identify with a descriptor for himself like architect or engineer, but instead told us he is a Marketer at heart. He’s a big picture kind of guy and constantly challenges himself to find the best application of technology for marketing purposes and profitable outcomes.

Through the years, Scott has developed a system to evaluate both consumer trends and marketing technology, where the outcome of his analysis is to find the sweet spot where brands are best served. He directs a multi-functional team of marketers, and business & technical product managers, and works alongside software developers and data scientists to get the job done.

At this time of the year, Scott says he is balancing a focus on both product and corporate marketing. With product road-mapping completed for 2022, Scott was in full execution mode when we spoke, effectively in the early stages of implementing plans across the company’s product development lifecycle as well as organizing corporate outreach in support of business development.

The state of loyalty marketing today

He shared his opinion on the state of Loyalty Marketing today saying, “In the time I’ve been doing this I’ve never seen so much change,” explaining, “the marketing need for companies’ ability to deliver first party data solutions has shot through the roof, while at the same time, the ability to deliver automated communications and offers in real time has finally caught up with demand. We’re living in a time where the supply and demand for personalized marketing is matching up perfectly.”

We often debate the nuances of the word “Loyalty” for our industry and wanted to get Scott’s opinion of what the term means today as well as to understand what brands are seeking from their providers.

Scott pointed out one of the most important realities of consumer marketing today saying, “The consumer is in charge of their own data and there’s a level of expectation firmly set. Brands had better make good on protecting the data they collect and use it carefully to demonstrate relevancy.” He went on to express an opinion that consumers are willing to share information as long as they have confidence the brand will apply serious stewardship to protect it. “That’s the symbiotic relationship that you’re dancing with,” said Scott.

It’s a given that the world of Martech has evolved greatly over the past 5, if not 10 years. Many foundational aspects of how retail technology works is different today and we asked Scott if he could give us an explanation in lay terms of these differences. “The number of vendors on the scene today is exponentially bigger. In the past, the majority offered single function marketing solutions. Now we see a prevalence of SaaS solutions built to solve a specific business problem.”

Scott continued, “There’s an expectation now that everything is connected. The customer may start a search or purchase in one channel and finish it up in the next. The offer they trigger in their mobile app needs to be available and clickable in the physical store. Everything is expected to be available immediately and work cohesively. Progression in real time technology has made this possible.”

Scott talked about the progression and innovation in data science that is foundational to delivering offers that work in real time. There may have been systems and approaches to triage data in the past for the same result, but it was difficult to execute at scale. Machine learning can be applied today to quickly filter through all data and arrive at the right content and offers. “Machine learning automates business decision-making and enables the optimization opportunity. What we also have today are models that continuously learn from a result, so outcomes improve over time.”

We queried Scott about what topics are akin to catnip for executives today. The words came quickly, “We’re often talking to a mix of the CMO and CIO to execute customer solutions. Scalability and Security are typically the two hottest topics. You can’t get off the ground without being able to address these two items. The data threat is huge today and we lead with that. It’s an important message and ignoring it can be a showstopper.”

We talked about the pandemic too, noting that retailers that relied on foot traffic were especially vulnerable to disruption over the past two years. The situation underscored that most brands had been doing a terrific job collecting and managing customer data but lacked the ability to action it when traditional touch points shut down. Scott stated, “The need for solutions that are automated and machine optimized can unlock the value of the collected data. First party data is what we’re talking about, and it needs to be managed well for the Zero Party Data that many now seek can be leveraged for even more value.”

The hybrid approach to loyalty solutions

Scott also commented on the cycling of preference for full-service solution providers versus those offering more narrowly focused solutions. “For many years, the “end to end” service provider was preferred and even today some buyers take comfort in buying from the “big name.” But a dominant theme that I see today is the requirement for agility and flexibility in the tech stack.”

Some warn against knitting together solutions in portfolio fashion, but Scott reminded us that total cost of ownership remains important in the c-suite today saying, “CIOs today are looking for the highest value at the best cost and are attentive to avoiding situations that lead to a forced rip and replace to upgrade a platform. As a retailer, you may not need all the capabilities across the product group, but you will probably end up paying for it.”

Scott also shared a sage reminder that many full-service solution providers have built their capabilities through acquisition. As a result, the promise of interoperability among apps in a suite may not exist as readily as one would expect.

The hybrid approach, practiced by Exchange Solutions, is to develop a full suite of products that effectively creates a one stop shop, though with modular architecture. Scott explained, “As a provider, we’re focused on solving business problems and try to be as flexible as possible. We created several products from a shared code base and built-in layers and switches to provide the flexibility that is in demand today.” He added, “We see many companies wanting to revamp their platforms or add specific capabilities and our modular product set allows them to trial and learn in a flexible environment that breeds quick speed to market responses to consumer demands.”

Regarding the future, Scott shared that Martech solution providers need to remain vigilant about delivering value, whether measured by increased CLTV, acquisition rates, or other measures. While it is easy to become distracted by hot topics like Blockchain and the Metaverse, traction with a CMO/CIO is more readily found through discussion about return on investment and decision support to generate increasing revenues and value.

He also mentioned the importance of adapting solutions to meet specific industry needs. In every day retail brands such as grocery, pharmacy and convenience, campaign execution and measurement must account for the purchasing cadence in the business. “Every vertical has its unique challenges,” said Scott. He continued, “You’ve got to adapt solutions creatively to recognize people on an individual level. Consumer behavior has changed so quickly, and technology has to keep the pace to justify investment.”

Scott MacDonald is Vice President, Product & Marketing, Exchange Solutions.

New Reality for Martech and Loyalty: An Interview With Scott MacDonald
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