Last month, Walgreen Co. announced that it had enlisted Qardio as its newest partner for its private Balance Rewards API. When ProgrammableWeb spotted the very brief post on the Walgreens Developer Blog, I reached out to the company's director of Digital & Marketing Joe Rago for the gory details. For ProgrammableWeb's audience members who are contemplating which direction to take their API strategies, this use case touches on at least two important questions; (1) Why provide an API? and (2) Should my API be public or private?
I still don't think anybody put it better than ChallengePost's Brian Koles in his ReadWrite.com headline that A Company Without An API Is Like A Computer Without The Internet. As it turns out, there are many reasons that every organization should aspire to have a wholly API-driven technology Stack. In fact, so many reasons that we're about to publish a list (we'll update this article with a link when we have it ready). Some of the obvious ones have to do with creating new revenue streams or leveraging highly imaginative developers to drive innovation for your company. But in the case of Walgreens' partnership with Qardio, the objective according to Rago is to generate more customer loyalty. In terms of the list of reasons for providing APIs that we're developing at ProgrammableWeb, this falls under the rubrick of creating an immersive, 360 degree view of the customer. Keep in mind that loyalty programs typically generate tons of data that help merchants to remain even more engaged with the customer than they already are (eg: personalized special offers based on previous purchases).
So, how can an API help Walgreens achieve improved customer loyalty? In the case of health gadget maker Qardio, the plan is pretty straightforward. Walgreens customers who use QardioArm -- a blood pressure measurement device that looks like it was designed by the same people who design iPods -- will get 20 points added to their Walgreens Balance Rewards balance for each day that they check their blood pressure with the device. In fact, according to the documentation for the Balance Rewards API, there are rewards that can be had for all sorts of activities including logged miles, weigh-ins, and glucose measurements (those activities may require other devices, but Walgreens customers who want to enlist in the program should go here).
According to Rago, customers who engage with the program are limited to 1,000 points per month across all activities combined. Looking at Walgreens' Balance Rewards Web site, each 1,000 points is worth about one dollar (a bit more in the case of customers who accumulate a lot of points through other means). Although it's worth asking, I'm going to set aside the question of whether $12 of potential annual "earnings" (redeemable value) is enough to promote additional loyalty. More important is how Walgreens has architecturally included APIs in the flow of its loyalty ecosystem, roping-in partners like Qardio that it might not have otherwise done business with.
So, how did Qardio end up as a Walgreens partner? According to Rago, "[Qardio was] one of the applications that we evaluated as a complementary fit for the Balance Rewards API." There are others listed on Walgreens Developer Portal such as such as Misfit and Nudge, each of which supports other Balance Reward point generating activities such as daily steps taken. But, in terms of picking partners, there was clearly a vetting process whereby Walgreens evaluated in-bound applications (one of the several ways for an API provider to identify potential partners).
Going back to the question of why do an API, another reason might be to drive an ecosystem that your organization is creating through venture investments. While Rago told ProgrammableWeb that Walgreens has no financial stake or interest in Qardio, it's not difficult to imagine how APIs could have played a role in driving the success of both companies if it did. In this fictitious scenario, Walgreens would get the improved customer loyalty while driving the success of Qardio in which it has an investment because of how Walgreens' customers might flock to Qardio to get the QardioArm needed to goose their loyalty points.
So, from a technical API perspective, how does the partnership work under the hood? The process is a textbook OAuth implementation whereby Walgreens customers must authorize Qardio to update their Balance Rewards accounts much the same way Twitter users authorize Buffer to make Twitter posts on their behalf (behind the scenes of the authorization, Walgreens issues a unique OAuth token to each Qardio user). When a new blood pressure reading is taken using QardioArm, those readings are passed along with the unique OAuth token to the API which in turn passes the necessary data into Walgreens' Balance Rewards system which in turn validates the activity and posts the proper number of loyalty points to the customer's account.
Under this approach, Walgreens relies on itself instead of partners like Qardio to worry about exactly how many points to post as a result of any of the "healthy activities." For example, should Walgreens decide that $12 of annual earnings potential is not enough, they can change it without having to notify all of its partners to reprogram their apps for different award amounts.
When asked what else Walgreens could do with the diagnostic information it collects (for example, customize offers based on a customer's health profile), Rago did not give specifics and would only say that "Our API program enables extended customer engagement and loyalty. It’s another way for us to help customers get rewarded for making healthy choices." But, notwithstanding any privacy concerns (a looming issue for the Internet of Things) and with the Consumer Electronics Show (currently taking place in Las Vegas) currently swimming in data-spewing health and fitness devices (Qardio is an exhibitor), its not hard to envision the extent to which that data could be leveraged to increase customer engagement in the context of partnerships like the one Walgreens now has with Qardio.