HOW TO IMPROVE CUSTOMER LOYALTY
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Tips on how to improve customer loyalty with Rob Gallo
- If you have a customer loyalty program already, the people who are in your program using it are already loyal. Can they be more loyal?
- You have an emotional connection to a brand that leads you to engage with that brand. You might drive out of your way to get to a Starbucks if you have that emotional connection. That’s the first step in customer loyalty.
- The best thing to do for your customers is ease of use. Reduce friction on the user experience side. It needs to be seamless.
- Rather than points, rather than discounts, people want unique experiences that are personalized to them. Ask them what you can offer that would be appealing to them?
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If you have a customer loyalty program already, the people who are in your program using it are already loyal. Can they be more loyal?
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Doug: Welcome back listeners to another episode of Real Marketing Real Fast. Today in the studio I have joining me Rob Gallo, and he runs a company called Comp Links. So if your business deals with customers, and you want to understand what makes them tick, then you and I owe it to ourselves to glean some knowledge from someone who’s literally been there and done that.
Doug: So Rob is considered an expert in customer engagement and building consumer brand loyalty. He’s going to share some real life stories of his 20 years of successes and failures in that business, in the ultra competitive casino business that translates really into any business that deals with customers as their lifeblood. We had a great conversation. It kind of brought me back to years ago working in the customer loyalty business or space with retailers, and really just shone a light on how far technology’s advanced and how we can leverage this type of program to have our customers repeatedly come back, earn rewards elsewhere but spend that money with us.
Doug: So if that sounds interesting to you, I’d just suggest that you sit back, tune in, listen up. And then when you’ve got some questions at the end of the episode, make sure you reach out to Rob. So, hey Rob, welcome to the Real Marketing Real Fast podcast today.
Rob: Thanks, Doug. Thanks for having me.
Doug: So, super excited to talk to a fellow entrepreneur and really interested in kind of your deep expertise with engagement and customer loyalty. So do you want to give just a little bit of background for our listeners who don’t know you yet, on kind of what you’re doing and how you’re helping people?
Rob: Sure. So, starting back in the beginning and how it relates to marketing, I started in the online industry, advertising, and marketing back in ’95. So we used to advertise in the newspapers and get leads, and it was a laborious process. You’d put the ad out there, you’d wait two or three days for it to get approved, and then get in the paper the following week. And then by the end of the month maybe you’d have 10, 15, 20 leads.
Rob: And then CompuServe came about. And I know I’m dating myself, but you know the pre-AOL days and dial-up on a probably 300 baud rate modem. Again, dating myself, people don’t even know what that is. But nonetheless, I put an ad out on a forum and I had 16 leads by the end of the day and I was blown away. And I became an internet junkie since.
Rob: Then in 1997 I launched an online casino. I just happened to be at the right place at the right time, and it was phenomenal. So the marketing in that aspect was a completely separate animal. So when I started in ’97 there were probably five other properties in the industry and making money was easy. Cost per acquisition for a customer was $20, lifetime value was 900 so you could do the math. That’s how I got scarred.
Doug: That’s really cool. So why don’t you just share just a little bit of what you guys are doing with, with Comp Links so our guests understand what it is that you’re, what you’re actually doing today?
Rob: Yeah. So again, following up with the casino cause it kind of leads into that. In ’98 the company that we licensed the technology from didn’t have a CRM, a back end so to say. They gave us three flat files a day. So we ended up building a customer loyalty platform within our own technology. We just basically built it from scratch. And that was our start in the loyalty space. Cause I’m assuming most of your listeners might know, if you’ve been to a casino, you get a loyalty card, you go in and you play, you earn rewards. So we became very adept at understanding who our customer was, getting a granular view of how often they played, the amounts they played, the types of games they play, the days of the week they played. And it all made a difference.
Rob: So fast forward to 2010 I sold the business, quasi-retired, did very well. But in 2016 my daughter graduated from business school and we looked to acquire a company called Long Island Loyalty. They had a coalition loyalty platform that was pretty neat. Had about 250 merchants in their platform where you could say go to a deli, buy something, get 10% loaded onto this store value card and then spend it somewhere else in the network, and they settled up behind the scenes. So we tried to acquire the company. We just couldn’t come to terms with the owners. So we said, “Let’s build our own.” Then my daughter had a brilliant idea. She said, “Well why don’t we do it casino focused?” So that’s what we did.
Rob: We built a white label turnkey platform specific to the casino industry initially, but now we’re branching out into other verticals like entertainment, hotel, food, and beverage. It depends on the company and the amount of loyalty program subscribers that they have. So what it does in a nutshell is, it allows a company’s users in a customer loyalty program to earn rewards outside of that program for shopping online at places like Walmart, Amazon, Home Depot, Best Buy, Petco and a thousand other stores that pay us a commission. We share that commission with the consumer in the form of points that they can only redeem back at that initial client’s loyalty program.
Doug: Oh that’s really cool. I mean, I haven’t had a guest on my show yet talking about customer loyalty. Pretty familiar. I worked in that space for quite a while with a number of you know a restaurant. So I understand a bit of it. So in today’s terms, for our listeners who aren’t familiar what does a loyalty program look like to them? Cause at one point we had 500 cards in our wall cause everybody had their own program. And then the vision of the marketplace was, “Hey, we’re going to go to smart cards. You’re going to have one chip card and the chip’s going to have all your loyalty programs in one.” And fast forward to today. Now I’ve got my iPhone and I can load all my loyalty apps onto my iPhone. So what is your definition today of a customer loyalty program?
Rob: Great question. So when you look at it this way, Doug, each individual brand wants loyalty from its customers to its company and product and services, right? You think of Apple. You think of Starbucks and McDonald’s. They do what they can to keep you thinking of their brand more often. So when you think about what loyalty means to you personally, Doug, I don’t know if you use Apple or a PC, or if you drink Starbucks or Dunkin donuts, but you have an emotional connection to a brand that leads you to engage with that brand more often than anyone else. You might drive out of your way and pass a Dunkin Donuts to get to a Starbucks if you have that emotional connection. So that’s the first step in customer loyalty, right?
Rob: And most people get it wrong. It’s not just points. Points is an additional nice feature, but it’s not the end all be all. The real … So in addition to providing the service that we do, we actually help companies understand the objective that they’re looking to achieve. And we let them tell us what it is, and then we tailor the program to make sure that it answers those check marks.
Doug: So emotional contact you’re saying is one, and that totally makes sense. And I remember when, before Starbucks launched their program, I was invited to go meet with their executives in Seattle and they were … then we’re under NDA, but obviously has long passed. They were about to launch their Starbucks prepaid card, and they were looking to see if some of the initiatives that we’re working with loyalty could fit. And so a number of us in the office went and bought the prepaid cards as soon as they came out with the promise that we’d get together once a week and we talk about our experience and how we felt emotionally about carrying this card in our wallet.
Doug: And what was interesting was I noticed my purchases went up because I almost felt like they owed me something cause I had put $50 on the card. So not only did I only go back to Starbucks and walk past Tim Horton’s and Blends and all the other coffee stores, but I went there more often.
Rob: Yeah. Well, so you became part of the group that belongs to the Starbucks crowd, right?
Doug: Yeah.
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If you have a customer loyalty program already, the people who are in your program using it are already loyal. Can they be more loyal?
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Rob: So it’s not just you individually, it’s you wanted to be a part of something more than just that brand. It’s the tribal effect. So books have been written on it, but suffice it to say the easiest way to attain that is exactly like that. Creating that emotional bond between you and that company, whether it’s … it’s not always on price because obviously if you look at Starbucks price it’s astronomical in comparison to what a true cup of coffee tastes. But it’s the experience that you get when you get there. So it should be at every touchpoint. And it comes down to their marketing of the program as well, and how it makes you feel part of the group.
Doug: So beyond the emotional side, what’s the next step? Cause you said you help companies walk through this. So there’s the emotional connection like you said, to be part of a tribe, to be part of something bigger than you. So I’m part of the, y’know, I’m a Starbucks person and you’re a Dunkin Donuts person or whatever it is. What’s, what’s kind of the next connection with the consumer?
Rob: Well, the best thing to do is ease of use. So the reduced friction is on the user experience side. It needs to be seamless. So I know this, again, people every everywhere say it. And as you mentioned earlier on in the program, now it’s easier than ever because everyone has their phone with them. So if you’re not using an app to build your loyalty platform and vice versa, that’s a huge mistake. Don’t think of a card in someone’s wallet. I don’t even carry a wallet anymore. I have my phone that has all my information on it. So the ease of use and frictionless. That’s probably together combined with those two.
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SHARE THIS EPISODE: HOW TO IMPROVE CUSTOMER LOYALTY
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If you have a customer loyalty program already, the people who are in your program using it are already loyal. Can they be more loyal?
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Rob: And then the overall experience is how it feels to the customer to actually use. So 57% of loyalty members abandoned a loyalty program saying that it takes too long to earn a reward.
Doug: Wow.
Rob: So if it’s unattainable, that’s six out of 10 people that don’t use a rewards card anymore because it takes too long. So we looked at that one key component and decided, but suffice it to say, I mean getting back to the point, we did not invent the idea of what we do now. If you look at Ebates, Ebates is a perfect example of what we do at Comp Links, and that is we allow customers to engage with any brand that they want, but then earn a series of awards specific to them where in and Ebates, which is now Rakuten, that they can exchange for cash.
Rob: So we built a white label version of that whereby, let’s say Starbucks has all their customers that they can now in addition to buying stuff at their stores, buying coffee and food or whatever they could shop at Walmart, Home Depot, Best Buy, Petco, a thousand brand name stores, book travel, and earn rewards that they can exclusively use back at their Starbucks card.
Doug: That’s cool. In Canada, there’s one of our retailers who has done this, and I think they finally got it right. And I’ve seen lots of programs that you said come and go, but it’s amazing how they’ve produced a loyalty card, they’ve got a credit card, and they’ve tied in several other similar retailers where exactly what you said. So I go into the auto store and I buy something, I buy some new wax and stuff for my car, and then I earn points so I can go to the sports store and I can buy a new golf shirt or a new pair of shoes, in which case I generate points there as well. So I can go back to someplace else. So it’s interesting watching how these programs over the years have evolved.
Doug: So do you have an example of someone that you helped to, a business, name them or not name them, that didn’t have a loyalty program where they came to you guys and you helped them build a program? And then just talk to us a little bit about how that transformed their business.
Rob: Yeah. So our platform is not a loyalty program in and of itself. So a company that we work with already has a loyalty program.
Doug: Okay.
Rob: Our integration into that loyalty program is basically one line of code through an API. I don’t want to get into the technical weeds, but from a simplistic standpoint think of let’s say Starbucks. Now, I’ll give you a real-world example. We have Parks Casino, the largest casino in Pennsylvania. You go into the casino, you play video poker, Black Jack, slots, roulette. You earn rewards. Now when you go home, and as you rightly mentioned people are not in the casino, they’re only going to the casino 10 days a year on average. I mean, I know there’s some people listening saying that they’re there every day. They might be listening at the casino right now.
Doug: Yeah, I’m like, “I’ve got a few of my friends that are there at 10 o’clock every morning.”
Rob: But again, speaking averages. So the average consumer, a player is there 10 days a year. So the 355 days that they’re not there, they’re shopping, buying gifts, buying a fan from Home Depot, pet food for their dog. They’re traveling. What if you could earn rewards that you can only use back at Parks? Now they have an affinity to Parks in the first place, right?
Doug: Sure. Yeah.
Rob: Well what we’ve done was, we’ve created an engagement platform where while the customer is not on site he’s still thinking about the partner. She is still thinking about the Parks Casino brand because she’s shopping for school clothes for her kids, or he’s buying cigars, or she’s buying a ceiling fan from Home Depot, whatever it is. And they’re earning rewards that are encouraging them back to the casino.
Doug: Oh, that’s cool. Okay, now I get it. Sorry, I was looking at different concepts. That totally makes sense. I’ve got a loyalty program, and what I’m going to do is have different points of contact. So my card or loyalty program are the top of my consumer’s mind. And they can earn, but they have to come back and spend with me.
Rob: Correct.
Doug: Okay.
Rob: So it’s called a coalition loyalty program in its true sense, but it’s more of a hybrid in the sense … So coalition loyalty, I don’t know if you know the Plenti program that was by American Express a couple of years ago. It became defunct because, lots of reasons, but the main one was it became confusing for the consumer on the burn off-site.
Rob: So there’s two sides of a loyalty program. I can earn points and I can burn them, right. So how do I earn points? Plenti had a program where you can earn, same thing, from shopping at thousands of different locations. But the burn off-site was, I could go to mobile or Exxon, I could go to Hulu, I could go to AT&T, I could go to Macy’s, I could go to Rite Aid, one particular company in each vertical to burn them off.
Doug: Okay. Yep.
Rob: But sometimes it becomes too confusing for a consumer and the more choices you give them, the less likely they are to even make a choice.
Doug: Yep. I find that, especially when I’m looking at a wine list. Really, 300 pages? I mean, I appreciate the choices, but it can be if the Somali could come over and just pick one that’d be great.
Rob: Yeah. Just give me a Bordeaux and I’m good. So the reasoning again behind Plenti’s, I don’t want to say demise, but it became too convoluted on the burn off-site. So looking at that, we again focus specifically on, the only thing you could do with those points is burn them back at the flagship property who we build the platform for.
Doug: Right. Okay.
Rob: Which is a win/win because you think anyone that has a loyalty program, their primary objective is to get their customers to come back more often.
Doug: Yep. That’s the goal. Yep.
Rob: We run specific promotions for our clients whereby the earning of those points also trigger events. Like we gave away two tickets to see Steve Miller at the Excite Center, which is Parks Casino’s 5,000, 6,000 person stadium that they have all these events at. So it drives the customer back there. We give away a free glass of wine with every entree ordered at one of their restaurants on property.
Rob: So everything that we do is geared to drive the customer back to that property with the mindset that “Hey, all these extra perks and bonuses came to me through my everyday shopping anyway, and now I get to exchange them for rewards that are meaningful to me.”
Doug: Now from the loyalty program company, so if we want to go back to use the example of Parks, well actually maybe I shouldn’t cause they’re a client of yours. So let’s use someone who’s not a client. Go back to your Starbucks example. So Starbucks has a loyalty program. So if I’m Starbucks and I come to you and we roll out a program where I can leverage your platform to let my shoppers buy other places, do I get any of that insight on my consumers? Can I see the data of what they’re doing when they’re not at my store?
Rob: Absolutely. In fact, we share that data because it’s their data. In essence, we’re just a conduit between the merchants that someone shops at and those clients from Starbucks. So we share how much the purchase was for because they’re going to get a commission on it, what the product was and any details.
Rob: Now, not every merchant gives us that granularity. So for example, Office Depot just tells us “Someone bought something, $112, here’s your commission,” and we share it with the customer. Walmart gets down to 16 12 ounce bottles of X, Y, Z, or whatever the case may be. A Hunter ceiling fan, 52-inch blades, a light, it’ll show you the actual picture of it. So you get to build a 360-degree view of your customers to see what they’re doing outside your four walls.
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If you have a customer loyalty program already, the people who are in your program using it are already loyal. Can they be more loyal?
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Doug: Well that’s what I was thinking because that was the big appetite when we were doing lots of work in loyalty was less about the program and more about building more intelligence about your consumers to serve them better and to be able to go and identify and attract more. I recently just had Christopher Lochhead on my podcast, and we’re talking about the data flywheel and companies like Netflix who know everything that you’re watching and companies like Amazon that know everything that you’re buying. So in essence, you give a business that’s got a loyalty program the same ability to see their consumers as Amazon has.
Rob: Correct.
Doug: Well that’s really cool. So where do you see the opportunities moving forward? I mean, technology is moving quickly. There’s lots of people competing for our attention as consumers, no different than the days when I was talking about loyalty, why I can’t keep 50 cards in my wallet. Now I’ve only got, I only want to have so many apps on my phone. So where do you see it going in the next year or two?
Rob: That’s another great question, Doug. So I think really things are moving into the hands of the consumer at a much more rapid rate, in the sense that consumers have thousands of decisions to make every single day. I mean, narrow it down to the best two or three, four choices, whatever the case may be. But it comes down to the consumers’ mind share and how they think about each individual brand.
Rob: So again, what we do in loyalty and what most companies do in loyalty, I don’t want to say it’s the same, it’s ubiquitous, it’s not. But the differentiator is, what’s going to be personalized to me? So the first and foremost thing now I think is X, I can’t even say this word, but experience-oriented, put it to you that way. So-
Doug: I know what you’re trying to say, and I was going to try to say it, but my brain went, “No, you can’t say that word either,” so don’t worry about it.
Rob: So rather than points, rather than discounts, people want unique experiences that are personalized to them. So if you think from a loyalty perspective of a customer that you know on an, I don’t want to say an intimate basis, but you know what they like. They travel two or three times a year to a certain destination. When they rent a car, they rent a luxury vehicle. You know the types of or the brand of cigars that they smoke. You can kind of build a mental picture. And then with the artificial intelligence, you’re going to be able to determine what that customer is more likely to be motivated by in order to keep him interested in your brand and continue to buy from you.
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If you have a customer loyalty program already, the people who are in your program using it are already loyal. Can they be more loyal?
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Doug: Yeah, that makes sense. So in terms of kind of the big players that are out there, who do you think is doing a really good job? Because you know, there’s lots of people in the marketing business, and I’ll just relate it back to some of the stuff that I do. So in terms of email and direct response, a lot of people build a list and they just pound the list. And there’s no great experience for the consumer, there’s no insights to the consumers. They treat everybody equally. So is there anyone particular brand that you think is doing an extremely good job of making that experience great for customers?
Rob: Again, another great question, Doug and I’m going to give props to a company who, unfortunately, we did not win their business through an RFP, but it was Caesar’s Entertainment.
Doug: Okay. Yep.
Rob: So Caesar’s Entertainment, under the tutelage of Gary Luffman back in the day, back in the late nineties I think it was, and early two thousands he did player segmentation. Player segmentation too, I think it was 140 or 150 different variants. So to give you a real-world example, if I go to a casino with my wife, Caesar’s property, and we both have cards, a total reward card that they now just changed to Caesars Rewards. I play poker, and she plays slots. When we get home three, four days later, there’s going to be a piece of mail in the mail for me that’s telling me about the upcoming poker tournaments and schedule for my local casino that I visited. And she’s going to have a slots tournament, all slots oriented, things like that.
Rob: So in speaking to a consumer on an individual basis, getting that granularity makes a difference cause it feels more like they’re speaking to me. Now, granted, I know they’re sending that to everyone else that played poker, and my wife is getting the message that everyone else that played … But it’s counterintuitive to the sense that most marketers think, “Well she already placed slots. I should be talking to her about Pie Gow poker or Bingo.” But that’s not what interests her. The headline should be “slots”. That’s going to motivate her. The headline for me is only going to be poker, right? If it’s a blackjack tournament, it goes in the garbage.
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If you have a customer loyalty program already, the people who are in your program using it are already loyal. Can they be more loyal?
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Rob: Now that’s not to say that you can’t have the headline be poker and everything, and then a little blurb about “Other people who have enjoyed poker also like blackjack, and they found this variant of the game.” So obviously that goes back to Amazon, and “Other people like you who bought this also bought this.”
Doug: Yeah. That’s immediately what came to my mind. As soon as you said that I went, “Yep, that’s Amazon.” You know, “Other people bought this too,” so it’s like, okay, so you look at it.
Rob: Yeah. Yeah. So their rewards program is a little bit different, and that’s becoming a bigger trend now where people are a subscription-based loyalty program. You’re paying for Prime, and now like you mentioned before, you almost feel obligated to buy something on Prime cause it’s going to be here in two days, and you’ve already spent the $115 a year or whatever it is to be a member.
Doug: Yeah, absolutely. Yep. I mean that’s like you said, it puts it top of mind. People say, “You pay attention to what you pay for.”
Rob: Yeah, exactly.
Doug: So how does that play into kind of today’s world of engagement? Because everyone’s talking about engagement, gamification, and brands obviously struggle with that. So on the marketing side, they’re talking about, “Well, how can we create content, and what should we do in social?” And everyone’s looking at how to have a deeper engagement with their customers. And I obviously encourage engagement, and not always be 100% selling. Quit sending me sales offers every single day. There’s more to me in my life than just buying your product. I can only go, like you said, to the casino or Starbucks so many times. So help me out with something else. So where do you see customer engagement moving forward the next couple of years, in terms of looking at your strategy and what you guys are rolling out?
Rob: Yeah, this is going to sound antiquated, but you should ask your customer-
Doug: Oh no, not the customer. The marketing guys don’t know everything?
Rob: Yeah. Ask them what you can offer that would be appealing to them, as silly as that sounds. But what would motivate you? What is it that we have that you want, or what is it that you want in and of itself? And we’ll work and strive to bring it to you
Doug: Or what is it that you want that we don’t have?
Rob: Yeah, yeah.
Doug: We did that with a client that was in the skincare business. They had a license with Guthy Renker for their big skincare product, Proactive Solutions. So one of the questions on a survey that I had them send out to the customer was, “What else would you buy from us if we offered it?” It was just an open-ended question. And that led to this company launching a haircare line.
Rob: And was this [inaudible 00:25:36].
Doug: Yeah. Enough of the customers put their hand up and said, “You know what, if you guys had hair care products we would buy hair care.” So I just took them to a big manufacturer that was a big name brand and said “We’d like you guys to white label hair care products. We have this many customers who’ve already put their hand up and said they’d buy it.” And that was a simple question and saying, “What else would you buy?” And they clearly weren’t in the haircare business. They were just a reseller of somebody else’s product, but they developed their own product line.
Rob: A hundred percent. So that dovetails into exactly what we do, and why we decided to do it was exactly that. So if you have a loyalty program already, the people who are in your program using it are already loyal. Can they be more loyal? What else do they do outside of being loyal to you that you could provide them offers to get them to be more loyal back to your brand?
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If you have a customer loyalty program already, the people who are in your program using it are already loyal. Can they be more loyal?
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Doug: Well, and the nice thing is it’s not coming out of your … like, I’m not a huge fan of discounts, just in terms of my clients, I’m saying, “Don’t give your product or service away. You obviously have something that’s valuable. So ask for full-price.”
Rob: Yes.
Doug: But if you do want to incentivize something, let’s go find a partner who’s willing to step up. So we would do this lots of times in the restaurant industry. I know that lots of work in the restaurant industry. So we would go to restaurants and get them to give the gift. So here’s a $25 gift certificate for the restaurant and instead of a buy one get one, cause that sounds cheesy, $25 is basically the same thing. And that was a third party then supplying the incentive to keep that customer loyal with us, but we didn’t have to pay for the gift.
Rob: A hundred percent. So we have a third party, fourth party, up to the thousandth party. Yeah. And that’s kind of how Kayak built this model on the aggregation of allowing customers to click a button and shop for an airline, an airfare. Instead of being comparison shopping on 15 different airline sites, they do it on one and they get a commission. And they basically pay arbitrage on the commissions.
Doug: So without digging into all your secret sauce, so if I’m a business owner, so for our listeners who are saying, “Okay, I have a store, online, offline, whatever it is,” or “I have a loyalty program.” The reward that’s received at Home Depot in your example, do I pay for that?
Rob: No, we do. So the way it works is, just imagine a referral program or an affiliate program that we belong to thousands of affiliate programs. So Home Depot pays us 8% commission for any sale that we send to them. So we share that commission with the consumer. We give them 4%. We keep 4%. The only thing the customer could do with the 4% … so let’s say he buys something for $100, he gets $4 worth of stored value in his Rewards Everywhere account that the only thing he could do is exchange them back to the flagship property. In this case, we’re using the example of Parks Casino. So Parks says, “It doesn’t cost us money.” We give the Parks the $4 that the customer transfers.
Doug: Yeah, yeah, yeah. Well, that’s what I’m thinking. I’m thinking this sounds like a pretty simple equation. So I’m going to introduce you to, I don’t know, pick a number, 500 different retailers where your customers can go shop. And every time they shop there I’m going to give them money so they’ll come back and spend it in your store.
Rob: Yes.
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If you have a customer loyalty program already, the people who are in your program using it are already loyal. Can they be more loyal?
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Doug: Okay. That’s pretty simple.
Rob: Yeah. So Southwest has a program, every airline does. Barclay’s bank has a program. Fuel rewards is probably the best example. Shell. If you go to Shell and you are a member of their rewards program, you buy gas, you get rewards that you can get more gas. In addition, they have the Fuel Rewards program that is run by a competitor of ours, but they do a phenomenal job. They advertise on television that you could shop at all these different places, you could buy travel … Again, pretty much the same groups of companies that we have. Buy something from Target and you can earn money off of your gas in a closed-loop type of relationship.
Doug: Right. Yeah, no, I get that. I mean the disadvantages I’ve seen with those types of programs because I’ve met with a number of those groups, I’ve met with the Home Depots and the Air Miles guys in the past, is that I’ve always found it’s a disadvantage sometimes for the merchant to take them because the customer is loyal to that card. And if I stop offering that reward the customer will move on. But I haven’t seen a program like you’re mentioning, so what type of customers or what type of clients would you typically onboard? So if we’re listening, our audience is listening saying, “Okay, is this a fit for me?” Who would this be a fit for?
Rob: It would be a fit for anyone that has at least 20,000 active members in their loyalty program. It’s based on volume. The numbers are not astronomical. It’s not every single person who’s going to adopt this and start shopping and generating tons of revenue. It’s incremental, but it works on volume. So when you think about 20,000 active members in someone’s loyalty, program and we consider an active member as someone who has earned at least one point in the last 90 days, then it makes financial sense the way the numbers back out. Because the average consumer is going to generate between two and $3 in commissions on a monthly basis for themselves by shopping through these platforms.
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If you have a customer loyalty program already, the people who are in your program using it are already loyal. Can they be more loyal?
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Rob: So, like I said, when someone goes to Home Depot, you’re not going to buy a ceiling fan from Home Depot every day, but let’s say it’s $100 and they’re going to earn 4 dollars in commissions. That’s, a decent-sized purchase on a regular basis. But we have customers that are going to Sam’s Club through our platform and buying stuff for their businesses. And they’re buying lots of stuff for their businesses, and they’re earning maybe 30 or 40 dollars worth of commissions every month. But the averages, the law of averages, bring it down to about between two and three dollars. It’s $2.40 on average.
Doug: Okay. That’s funny. I mean, that’s data, right? So there you go. You’ve got the exact number. So what are you most excited about next, I don’t know, six to 12 months?
Rob: What I’m excited about in the next six to 12 months I think is the, again, I don’t like to use the term artificial intelligence because it might not necessarily be that, but it’s the programmatic way people are engaging with, I guess we’ll call them bots. Good, intelligent chatbots. And I’ve seen good ones and I’ve seen bad ones. I can’t think of a specific example of good ones, but you know what I mean. [crosstalk 00:32:34] a site and it’s telling you … And you can see, they make it clear that it’s a bot. But it’s trying to depict what you are saying, and steering you to the right answers.
Rob: And I guess the accelerated answer to this is, I remember back in the day I bought a program called, it was a voice type dictation thing. I’ve been in front of a computer for 25 years, I still can’t type. But it called Dragon Voice or something like that. And I paid $800 for it way back in the 90s, and it was terrible. I had to sit and practice, and teach it for hours and hours and hours to get it to understand what I wanted it to type. Now Google gets it right, and voice inflection, almost every time. So the advances in programming type of language that people are going to start to understand what people are really asking are the intriguing thing, I think, in the next six to 12 months. It’s going to get even crazier.
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If you have a customer loyalty program already, the people who are in your program using it are already loyal. Can they be more loyal?
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Doug: Yeah. I’m super excited kind of how technology is rolling out and seeing, to use the buzzword AI and machine learning and programmatic advertising. There’s so many changes coming. Obviously still require human intervention, but machines can look at a lot more variables and help us look at options that we couldn’t see with our naked eye.
Rob: Yeah, yeah, for sure.
Doug: So in the loyalty space, what’s the bad advice you hear? So if you’re at the big marketing conference, like I used to go to the DMA for years and years and they always had, there was a guy speaking about loyalty and guys speaking about direct mail. So what’s the bad advice that you hear when you just want to go interrupt the conversation and go, “No, you’re way off base”?
Rob: Yeah. The biggest problem I think is status quo. I think people recognize, well we built a loyalty program, right? But they don’t understand the metrics. They don’t understand what it really means to engage with a user. And sometimes you have to take your own advice and be on the receiving end of it. And how do you feel when you interact with a brand? And then kind of translate that into what it is that you’re attempting to provide with your loyalty program.
Rob: So the biggest issue that I see right now is people are comfortable in the fact that they have a loyalty program, but aren’t really peeling back the onion to see why the churn is so high. The attrition is ridiculous, and they don’t understand it, and they don’t know what to do about it. And they’re not seeking out opportunities to improve it.
Doug: So to this status quo, say, “Hey, we built this already and then we’re off to the next new shiny thing.”
Rob: Yes. Yeah.
Doug: Yeah. And that’s why we have companies like Blockbuster Videos. Oh, who are they? Nokia, right?
Rob: Yeah.
Doug: They don’t need to innovate.
Rob: Yeah.
Doug: So two last questions and I’ll let you get back to serving your customers. I love this conversation. I could talk to you for hours on this. I have a deep interest in and have had, an interest in loyalty for a long time. But who’s one guest you think I absolutely have to have on my podcast?
Rob: One guest you have to have on your podcast, marketing. I’m going to say-
Doug: Marketing, business, sales.
Rob: Business sales, Gary Vaynerchuk.
Doug: There we are. So if you can introduce me to him that would be great.
Rob: I will do my best.
Doug: And where’s the best place for people to connect with you, Rob?
Rob: We actually set up a specific page. So it’s complinks.co, just.co, forward slash R M R F for Real Marketing Real Fast.
Doug: Excellent.
Rob: And also on LinkedIn. I’ve got maybe 10,000 connections on LinkedIn already.
Doug: Well there you go. Well, I appreciate you taking time today, and sharing what you’re doing. I think I try to keep up to date on what’s happening. Stuff is moving so quickly. I haven’t seen any major innovations like what you’re sharing in the loyalty space. And that’s why when I start talking to you and I looked at your bio and your background before we hopped online thinking I haven’t talked to anybody in loyalty in a long time. It’s been a very quiet subject. It seems that everybody wants to talk about LinkedIn, video, TikTok. And I’ve always told people that the money, the riches, really are in your database. So go back to your own database and find out how you can mine that. And I think you’ve shown, you’ve given us some ideas of how to do that, but also to leverage partnerships.
Rob: Yeah, absolutely. And you know, there’s an old adage in marketing that it’s six times more cost-effective to retain a customer than to acquire a new one.
Doug: It’s funny that you mention that. Every, almost, I was going to say every time, but it wouldn’t be true, almost every time I speak in front of a crowd I ask that question. I said, “So how many people here have heard that it costs six times more to acquire a new customer?” And everybody puts up their hand. So I said, “Okay, so let’s talk about your marketing budget. If your marketing budget is $100, what percentage of that are you spending on retention, and what percentage of you spending on the acquisition?” And while we both know what the answer is, everybody’s spending all their money on acquisition. It’s like, “Well, didn’t you just say not 30 seconds ago that it costs ten times more?”
Rob: Yes, 100%.
Doug: So there you go, listeners. I hope you get that point. I’m a big fan of loyalty. Loyalty programs have had success, have seen success. Love what Rob and his company are doing. Years ago when we were in this space, it was cost-prohibitive to do this, to create programs. There certainly wasn’t these types of partnerships available where you could connect with someone like Rob at Comp Links and plug and play your existing program. So I would really encourage you, if this is the space you’re in, if you’ve got a loyalty program, head over and take a look at what they’re doing, and then reach out to and see if they can help you out. So thanks for tuning in. We look forward to serving you on our next episode.
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SHARE THIS EPISODE: HOW TO IMPROVE CUSTOMER LOYALTY
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If you have a customer loyalty program already, the people who are in your program using it are already loyal. Can they be more loyal?
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Get in touch with Rob:
- Special Offer – Resources mentioned in the interview
- Web – Complinks
- Rob on LinkedIn
Find out more about Rob:
- Podcast – The Loyalty Minute
Links to other related podcasts and or blog posts:
HOW TO BENEFIT FROM THE NEW WORLD OF AFFILIATE MARKETING
HOW TO IMPROVE THE CUSTOMER SERVICE EXPERIENCE