Are you considering the future of integrated loyalty programs yet? What will your customer experience platform look like in five or ten, even twenty years? You’ll certainly have more options than ever thanks to technology. ‘Headless’ loyalty systems will definitely be amonsgt them. They are API-first options that are already making processes simpler to implement and quicker to deploy, What are they? How do they differ from current choices? What benefits do they bring? We discuss exciting developments in the ‘headless’ space in the following.
Loyalty marketers aren’t necessarily thinking of headless loyalty platforms yet, but they should be. ‘Headlessness’ is a rapidly accelerating topic of discussion for brands. It promises unprecedented levels of agility making it highly attractive for those operating in rapidly changing customer-facing sectors. If your loyalty platform is a pizza, to use a clumsy simile, headless commerce gives unlimited, immediately available and ever-changing toppings.
In comparison, many loyalty industry players still operate on tightly integrated legacy technology platforms making change slow and costly. This is a huge barrier in a world where brands can have an idea and take it to market in a matter of weeks. Speed, therefore, is the main benefit of a headless world, where front end loyalty activity and customer touchpoints can be decoupled from back-office functions,
So, how does headless commerce work?
Application Programming Interfaces, commonly known as APIs, are software intermediaries that manage dataflows between platforms. A frontend platform and a backend platform can operate entirely independently from the same data with an API between them. The most common application is CRM, but today applications are widening to include loyalty programs and gamification.
New API-first, backend systems are described as ‘headless’ because the customer-facing (head) component is no longer tightly integrated. It’s a plug-in-and-play model that is already on leading loyalty marketers’ radar. It allows brands to quickly and easily enable, measure and monetise consistent customer experiences with minimal upfront investment.
Brands can use common, enterprise-wide systems on the backend, and customise the customer experience on many different frontend platforms and channels. This is important because Harvard Business Review stated in 2017 that 73% of customers are using multiple channels at the same time. That number is certainly higher today.
Headless loyalty systems make multichannel operation easy compared to, for example, adapting a monolithic loyalty system to work with Instagram, WeChat, or Facebook for example.
There are, of course, modules within any gamified loyalty program such as the points bank, rules engine, CRM and analytics, campaign management and redemption catalogue. Traditionally, these are tightly bound together but a headless system lets Api-led systems free up access. Developers are immediately better placed to design scalable and responsive tools for their clients. Cost reduction is a key driver here. Easier access means less time writing bespoke code. With this in mind, it’s worth remembering that tailored solutions from software vendors cost brands anything from $25,000 to $5M in the past. API-driven loyalty and gamification systems are not only cheaper. They are can also be more secure – storing data in one place and then ensure it is encrypted as it travels. There is a lot to love about going headless.
Anyone who wants to proceed in developing gamified loyalty marketing functionality into their own customer-facing platforms should be exploring their options. API-first loyalty and game platforms are fairly simple conceptually, but there’s a lot of thinking, research and development behind their implementation. Suppliers are, however, thinking of innovative charging models to recoup their investments. CapEx and flat traditional licence fees are being dropped in favour of a share of transactions by some This means your gamification system supplier is incentivised to grow alongside you. What is there to lose?
Despite the innovations we have described above, the loyalty industry still operates mostly on legacy technology platforms. Headless API-led solutions will become increasingly normalised quickly though. We have only had the chance to skate over key features and opportunities in this article but, as loyalty marketers, the more you know about the emerging trend of headless systems the better. There are changes you can start making today to make sure you don’t miss out on the opportunities it presents.
What are your thoughts? Have you already dipped your toe in the water with API-led functionality? We would love to hear about your experiences and, perhaps, predictions for the future.