There are three key trends that are drivers for the atomic rewards idea: the unification of multiple B2C stacks into a single digital experience stack, the shift of spends from adtech (acquisition) to martech (retention and growth), and the increasing focus on engineering profitable customers for life.
Stacks: So far, the tech solutions for customer communications, engagement and experience have been largely independent. Enterprises have adopted point solutions as they felt the need. But this is now changing. With the need for a unified customer view, there is a push towards having a single natively integrated stack rather than stitching various solutions together. The former approach helps reduce integration costs, eliminates data silos, and enables the magic of AI-ML to work on the data. Having all data in a single store also enables atomic rewards: marketers can now orchestrate omnichannel journeys and identify moments earlier in the purchase cycle where the right nudges targeted towards increasing attention and engagement can make a difference.
Spends: Acquisition of new customers has been the priority for most enterprises. With easy availability of capital, marketers have been channelling huge spends towards Google and Facebook to acquire new customers at all costs. The result is that only 10-20% of the marketing budget is spent on customer retention and growth. As a result, deep customer relationships are hard to build and customers become inactive or churn – only to be reacquired via the adtech spends! My estimate is that a third of the spends on customer acquisition are directed to churned customers. This is where atomic rewards can make a huge impact: instead of spending on Big Tech, marketers can directly reward their existing customers to keep the brand hotline alive.
Profitability: In the coming years, as investors realise that the pool of profitable customers is limited, they will demand a path to profitability from enterprises. Selling Rs 100 for Rs 99 can get infinite customers but that is not going to build an enduring, great company. Creating a “profits moat” means that the enterprise has to attract the category’s best customers, maximise revenue from them, and turn them into micro-influencers by getting them to refer their family and friends. This needs differentiated experiences, which in turn requires sustained attention and continuous engagement. This is where atomic rewards can play a role – by focusing not just on the transaction but on the top and middle of the persuasion funnel.
All these three trends will accelerate the need for atomic rewards because attention and engagement will rise in importance in the customer journey, with the transaction (purchase) an outcome of a happy customer relationship.