Blockchain To Transform Loyalty Programs, Intelligent Assistants Aid Customer Experience, and Design Thinking Drives Digital Success

Tal Solutions’ FRAMEWORK newsletter presents you with a bi-monthly collection of curated, personally selected content and media focused on big ideas about and beyond Data Analytics—all with Marcia Tal’s insightful point-of-view and commentary.


FRAMEWORK : Data Analytics

Points and Miles and Rewards: Blockchain to the Rescue!

In how many loyalty programs does your household participate?

According to Kowalewski, McLaughlin and Hill’s HBR article “Blockchain Will Transform Customer Loyalty Programs,” the average U.S. household “participates in 29 different loyalty programs.”

If you’re a loyal customer, you may still say: “I don’t know when to use what. I have miles. I have points. I have cash. What is my best deal?”

Even worse, the “result is a maze of point systems and redemption options, with cumbersome processes for exchanging points among program partners.” In short, loyalty programs are “ripe for some kind of disruptive innovation that would make them easier to use.”

The authors believe blockchain “may just be the answer.”

It’s refreshing to finally see a clear explanation of a blockchain application closely related to consumers.

Here’s their explanation of how a blockchain-based loyalty program would work:

“Blockchain enables a ledger of transactions to be shared across a network of participants.

When a new digital transaction occurs (for example, a loyalty point is issued, redeemed, or exchanged), a unique algorithm-generated token is created and assigned to that transaction. Tokens are grouped into blocks (for example, every 10 minutes) and distributed across the network, updating every ledger at once.

New transaction blocks are validated and linked to older blocks, creating a strong, secure, and verifiable record of all transactions, without the need for intermediaries or centralized databases.”

Having been formerly disrupted by online travel agencies (OTAs), the authors believe that the travel industry is the “most at risk” for blockchain disruption.

The authors envision “development of four to six blockchain-based loyalty networks, each anchored by an airline, a hotel chain, or a group of smaller travel companies.”

What might this platform and blockchain network look like?

Visualize a bank or payment processor and airline as partner-anchors. Included in the network could be a major hotel company, car rentals, restaurants, sports and concert venues, etc.

And what would this mean for consumers?

The authors conclude that “for consumers juggling an array of loyalty programs, blockchain could provide instant redemption and exchange for multiple loyalty point currencies on a single platform. With only one wallet for points, customers would not have to hunt for each program’s options, limitations and redemption rules.”

Where are we now?

Just one example: IBM and startup Loyyal are now partnering “to develop a blockchain infrastructure for loyalty and reward programs.”

Look at this article for yourself—and you’ll see why I’m ready to join a blockchain-based travel loyalty program today.


FRAMEWORK : Data Products Design

Let Purpose Guide Your Design Thinking to Digital Success

What is the secret to digital success?

Clint Boulton’s CIO.com article “What is design thinking? The secret to digital success,” makes a strong case for “design thinking.”

Also, known as “human-centered design,” design thinking “involves tapping into human experience when creating new products and services.”

Over the years, our work in data analytics and product development has included “design thinking”—without ever having called our process “design thinking.”

First we ask: What problem(s) are we solving?

How exactly will our solutions enable business transformation through increased customer engagement?

Accordingly, any solution must have a purpose: that purpose becomes the frame. This is exactly the first of five steps that Chris Pacione, CEO of LUMA Institute, recommends to the author for “design thinking in practice.”

Problem framing—it begins with people framing the problems: asking simple questions about what it is they are trying to do and who they’re doing it for. 

Empathy—understand the people involved, both the users and the stakeholders who must install, service and maintain the solutions. 

Iteration—at the core of this mindset is the iterative process that allows you to build, test and improve. And allow for “natural small failures.” 

Project failure points—identify the bugs and fix them, and today it’s possible to automate many types of fixes with innovative new tools. 

Collaboration—implementing anything in business is by nature cross-functional, and today this involves business stakeholders, clients and end users.

In the “Digital Dark Ages, user friendliness was often an afterthought.” Today, product designers are asking what they need to do to make their products “human, useful and desirable.”

To embrace design thinking, the author says you can “develop a design culture,” set up innovation labs, and create digital accelerators.

That’s all good advice—if you know your purpose and create a framework to direct your solution.

As American designer and architect Charles Eames reminds us:

“Design is a plan for arranging elements in such a way as best to accomplish a particular purpose.”

Whether creating a lounge chair, a skyscraper, or a data analytics product, don’t let the simplicity of knowing your purpose fool you. Simplicity in purpose will better guide you through the complexity of execution.


FRAMEWORK : Voice of Consumer

Learn Something New from Swedish Banks

Meet the perfect bank employee, Aida.

“Always courteous, always learning, and, as she says, ‘always at work, 24/7, 365 days a year.’”

American Banker introduces us to a virtual customer service representative and other AI creations in “Your banker is always in: Sweden rolls out the robots.”

“After blazing a trail in online and digital banking, Sweden’s financial industry is now emerging as pioneering the use of artificial intelligence.”

SEB’s Aida, Nova, a new chatbot at Nordea Bank AB, and the Swedbank AB virtual assistant, Nina, all use customer data to perform simple, repetitive tasks so that “actual humans” use their time to take on more complex customer service responsibilities.

Certainly, these creations and their “access to vast amounts of customer data” make it possible to better serve customers by being more efficient at handling “straightforward customer requests”—cancelling a credit card, paying bills online, or opening a savings account.

In turn, intelligent assistance will free up human employees to better engage customers in more complex matters, like selecting the “best mortgage plan to suit a specific customer,” or addressing specific customer dissatisfaction.

Like many countries, Sweden’s financial industry has closed many branch banks—and seen their customer satisfaction ratings drop “to a 20-year low” as a result. Market researcher GfK believes that AI applications such as chatbots “hold the promise of filling service gaps” created by the push from branch banks to online banking.

Here is the risk: the qualifier is “given the right data and programming.” Moreover, if a bank doesn’t have a unified, holistic view of the customer, and therefore can’t establish a context strategy, a chatbot may err in filling these service gaps.

It’s fascinating to watch Sweden roll out these innovations, and we all—humans and machines alike—will learn from their pioneering efforts.