Loyalty Programs, Marketing Automation & CDP: The Secret to Data-Driven Marketing

You cannot have a data-driven marketing strategy without marketing automation, CDPs and loyalty programs. Here’s what you need to know:

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If there’s any downside to deciding to pursue big-data strategies and data-driven marketing, it’s that you can’t do it on your own. Collecting and utilizing large amounts of information is only possible with the help of a third-party technology provider or two. But which one should you pick, and can some technologies be substituted by others? This article is dedicated to giving you a straight answer by comparing three major players in the field: customer data platforms, loyalty programs and marketing automation. 

What is Data-Driven Marketing?

In short, data-driven marketing is all about creating a personalized marketing strategy based on customer data. In other words, if you’re using churn prediction to predict the next best action for a customer segment, then target those customers with personalized emails and offers, you’re doing data-driven marketing.

In practicality, data-driven marketing can be executed in a variety of ways. Still, there are three recognizable pillars that need to be incorporated into your strategy, one way or another:

  • Insight about the customer, so you know what customers want
  • A relevant message, which will make customers want to listen
  • An enticing offer, which prompts customers to act 

Customer data platforms, marketing automation and loyalty programs all play a role in realizing a data-driven marketing strategy. But to what degree? Well, that depends on each company’s approach.

An image depicting the three pillars of data-driven marketing, symbolizing that it’s an eternal cycle.
Finding the strategy that fits your business and audience is key to data-driven marketing.

Customer Data Platforms, Loyalty Programs and Marketing Automation: What’s the difference?

When first setting out to pursue data-driven marketing, businesses often try to look for an all-in-one service provider that covers everything from data gathering to communication and even rewards. Before discussing whether this is possible (or even worth it), let’s take a look at what customer data platforms, marketing automation and loyalty programs excel at individually. 

Customer Data Platforms

CDPs can be described in a variety of ways, but in data-driven decision making, a customer data platform is responsible for collecting customer information and putting it into individual customer profiles. This data gathering happens across all available channels — from website and mobile engagement to in-store purchase data from the POS — and is meant to create one, all-encompassing customer view. 

The other major benefit of a CDP is that it uses high-caliber machine-learning algorithms and AI predictions to decide the next best action based on the data. This allows businesses to create more sophisticated segments based on nuanced information, such as product preferences or purchase history. As such, Customer Data Platforms are extremely useful tools for churn prediction. 

A screenshot depicting the dashboard of Antavo’s Loyalty Management Platform, showcasing tier-related statistics.
Loyalty programs often come with their own reporting capabilities, which can be useful to access reward-related insights like tier usage and coupon redemption rates. However, if you already have a CDP, make sure to integrate the two so you can see all the data in one place.

Marketing Automation

At the other end of the data-driven marketing strategy spectrum is marketing automation, which is responsible for putting your plan into motion. Marketing automation is all about execution: it provides you with unparalleled freedom when it comes to creating and managing emails, newsletters, or any other form of digital communication.

Not only that, marketing automation tools also allow you to A/B test different messages for a segment. This means you can send out multiple variations of email copy and gauge your audience’s response. Doing so provides invaluable insight and helps you perfect your personalization strategy by finding the right tone for each segment.

A personalized email from DavidsTea, showing interesting facts.
Here’s what a truly personalized email looks like: it has an encouraging tone, it demonstrates how much the company knows about the customers beyond basic numbers, and it has a distinct, branded style.

Loyalty Programs 

Loyalty programs are a bit hard to place, because they’re a tool that enhances all aspects of the customer journey, from beginning to end. Loyalty programs are geared towards changing how customers behave and interact with a company by rewarding specific actions. 

Loyalty programs allow you to increase the number of touchpoints you have with customers. They can be implemented to boost in-store engagement with treasure hunts, incentivize the completion of customer profiles and online surveys with bonus points, or even get customers to log in to a mobile app on a daily basis with challenge systems. And of course, there are the tiers, rewards and lifestyle-based mechanisms that make the customer experience one-of-a-kind. 

A banner recommending to download Antavo’s ‘The Definitive Guide to Creating a Successful Loyalty Program’ ebook
The topic of a next-gen loyalty program is extensive. For a comprehensive walkthrough about must-have features, program types and, of course, a smooth launch, download our in-depth ebook.

Can a Loyalty Program Substitute a CDP or a Marketing Automation Platform?

Technically, yes, but it’s generally not recommended. Loyalty program providers come in all shapes and sizes, and each has a different set of features. Some may offer built-in churn prediction capabilities, for example, while others might have built-in tools to handle basic email campaigns and functionality. 

Let’s say you’re running a premium loyalty program for a very limited (but high-value) audience, made up of only a few thousand members. In this case, the loyalty platform might be able to substitute for a marketing automation provider, for example, handling registration, password reset, and reward redemption emails.

An image comparing the key strengths of loyalty programs, cdp and marketing automation services.
Loyalty programs, marketing automation and CDP all have their strengths and focuses that cannot be topped by other service providers.

Going Solo Simply Isn’t Worth It

However, the general rule of thumb is that if you’re a growing enterprise, you’ll only benefit from using specialized technology. When it comes to churn prediction and data analysis, CDPs have the upper hand. Similarly, trying to get a loyalty platform to trigger and manage emails for even a mid-sized audience will not only cost a lot of development resources, but will also be less effective than using a marketing automation solution.

Of course, the pendulum swings the other way, too. CDPs may boast built-in reward capabilities, such as points or a referral system. But the truth is, such baseline features aren’t enough to differentiate a business from its competition. A pure-play loyalty technology provider has a robust list of loyalty logic and reward mechanisms to choose from, which is the only way to build a truly unique and custom-made loyalty program.

Unite instead of divide: here’s how you can maximize the effectiveness of a marketing strategy that uses both loyalty programs and marketing automation.

The Key to Data-Driven Decision Making Is Finding the Synergy

The reality of data-driven marketing is that you shouldn’t be asking “Which of the three is more important than the others”, but rather “How should I use all three to maximize the value?”

Incorporating all three at once no doubt provides the most benefits. For example, loyalty programs incentivize survey completion, which can then be fed to the CDP’s algorithms, while surprise & delight birthday emails can be enhanced with a gift, such as bonus points or a discount on the customer’s favorite product category.

Using a combination of tools is also the most convenient development-wise. The providers behind loyalty programs, customer data platforms and marketing automation tools work hard to enable a huge network of integrations so, no matter which vendor you’re working with, they’ll more than likely have the integration you need, out of the box.

Learn more about how loyalty programs and CDP platforms work together in our joint webinar with Exponea.

Taking the Next Step

With all that being said, it’s up to you to assemble your dream team of top loyalty program, marketing automation, and CDP vendors. As a pure-play loyalty provider specializing in headless commerce and omnichannel solutions, we’d be more than happy to show you our technology. Simply book a demo or send us your RFP.

Found this article while researching loyalty program providers? Take this handy comparison worksheet to make things easier!

A banner encouraging readers to download Antavo’s worksheet to compare loyalty program providers.

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Tamas Oszi

Tamas Oszi

Tamas is a Senior Content Marketing Manager at Antavo with a keen eye for loyalty and customer retention research and trends. He studied philosophy and has a strong background in journalism. Tamas is a true gamer at heart and has an impressive collection of cyberpunk books.

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