Before we get to discussing how to make Loyalty 2.0 a reality, let us summarise the key ideas we have discussed so far because they will point us to the implementation.
- The quest for sustainable profitable growth must begin with profit-centric marketing. In recent years, the extreme attraction towards new customer acquisition has shifted focus from customer relationship and experience management. Marketing budgets now skew heavily toward adtech rather than martech.
- Adtech has become a black hole for spending. Marketers are ignoring the “adwaste” that is happening because of reacquisition and wrong acquisition. The result is an unsustainable arms race in spending on Big Tech platforms to prop up what is being lost because of inadequate focus.
- With easy money from investors, brands are also spending heavily on discounting, offers and cashbacks – all of which are profit killers. With new age brands chasing only valuation and the next round of funding, the goal is to show topline growth whatever be the cost. Traditional businesses are left with no choice to compete. The only “profipolies” being created in this customer chase are Google and Facebook (Meta).
- To break away from this madness, brands will need to start focusing on the upstream of transactions: attention, engagement and habits. To enrich the lives of their customers, brands also need more volunteered data. The focus thus needs to shift from money to time. Win the battle for time, and only then will there be victory in the war for revenues.
- Brands need to therefore reward attention and data. This is the foundation for Loyalty 2.0.
- Attention begins with the push messages brands send out; they are the mechanism for bringing back customers to their properties. Thus, Loyalty 2.0 need to start with push messages. Zero-party data collection can also be done via push messages.
- Push messages are being largely ignored by customers today because they are filled with generic promotional content. This is where the innovations being championed by Email 2.0 come in.
- Loyalty 2.0 will not work if it is at the level of a single brand since the rewards will not be large enough to make it attractive for customers. These are “atomic rewards” – micro-incentives for micro-actions. They thus need to work pan-brand.
- The next question is: who runs such a pan-brand attention and data loyalty program? The right answer: no one! Loyalty 2.0 is run by rules, not rulers. This is where the intersection with Web3 comes in. A DAO (decentralised autonomous organisation) is the right home for a pan-brand Loyalty 2.0 program.
- The economic opportunity is huge: $200 billion is being wasted annually in spending on the adtech platforms on reacquisition and wrong acquisition. This is money which should be split between customers and brands. To disintermediate Big Tech’s centralised monopolies needs the disruptive innovations of Web3: a decentralised blockchain-based DAO-managed Loyalty 2.0 platform.
With this background, we are now ready to discuss how to bring Loyalty 2.0 to life. We need to think Mu, MuDAO, Micronbox and Muniverse.