Adam Torres and Jonathan Silver discuss loyalty programs.
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Show Notes:
Engage People is innovating and impacting loyalty programs around the world. In this episode, Adam Torres and Jonathan Silver, CEO at Engage People, explore Jonathan’s journey and the evolution of loyalty points.
About Jonathan Silver
Jonathan leads the long-term corporate strategy, marketing and sales at Engage People.
He has over 20 years of experience driving growth in the loyalty and technology industry. Prior to Engage People, Jonathan held numerous senior positions in the loyalty sector and was Chairman and Co-owner of MyAxs, and CEO and Co-founder of Access (formerly LRG Rewards).
About Engage People
At Engage People their goal is to bring innovation and impact to loyalty programs around the world. An innovative technology company, a leader in Loyalty programs, a Solution Provider with over 25 years of experience.
They start from the beginning what you want to achieve, from there they develop an integrated solution that includes the optimal technology, the ideal marketing and content, coupled with the best Loyalty options in the industry including pay with points. Everything is connected to deliver your objectives, whether sales and profit, loyalty, recruitment, or retention….everything is connected.
By applying a global solution to your market challenges, they help you understand your consumer, connect your brand, and inspire engagement. By understanding your challenges and goals they help you determine the actions and outcomes that will close those gaps. They do this by using data driven, targeted, and tested initiatives, keeping you ahead of your competition, to deliver against objectives.
Full Unedited Transcript
Hey, I’d like to welcome you to another episode of Mission Matters. My name is Adam Torres, and if you’d like to apply to be a guest on the show, just head on over to missionmatters. com and click on Be Our Guest to apply. All right, so today’s guest is Jonathan Silver, and he’s the CEO over at Engage People.
Jonathan, welcome to the show. Nice to nice to be on. Thanks for having me on your show. All right, Jonathan. So I got to tell you this right now and you do not know this about me, but loyalty points. I’m so bad at them and I just have never been good and I have some friends that they get into this.
They know how to do these things better. And then they tell me all these stories and I’m just lost. First off, before we get into engage people and everything else, how’d you get into the loyalty program or loyalty space in general? Where’d that come for you? I fought by accident back in my childhood days.
I was a computer programmer. I was going to do my CPA and be an accountant. And I was coding for a company that got sold to another loyalty company that asked me to come for 6 months and stay 10 years. And I’ve been doing this ever since. So yeah, it’s kind of what I say by accident, , what kept you in the space?
What drew you to it to stay there? So it’s a fascinating industry because you deal with companies across all industries at a strategic level. And so you get to see the way different companies in different industries handle their markets. And you’re a very powerful tool for engaging.
Participants and members and driving real measurable results. And so it ends up being challenging and fun at the same time. Hmm. And there’s, you know, very few things where, you know, over my career, I’ve worked with major banks, automotive, telcos, airlines, hotels, mining, you know, food and beverage. And so you get to see.
Did you say mining? Yes. I’ve done a loyalty program for sales channel for a mining company. Wow. What let’s I don’t, I don’t want to assume here. Maybe let’s just, let’s go a little bit further, but like benefits of a loyalty program. I don’t want to assume that everybody knows. Cause I, it’s still, even though we’ve heard of the, I’ll speak for myself.
Even though I’ve heard of them, I’ve been part of them. Like what I’ve never really, for my company, we haven’t done anything like that on our end. So what, like, what are some of the benefits that you’ve seen? Like why, why does this matter? So at the end of the day, if you think about it, if you’re a company that you spend.
a fortune acquiring new customers and the ability to engage and retain them is key to your profitability and success. Now a loyalty program won’t offset any product issues or service issues. But it does give you a little bit more runway when things go bad. And so what happens is if we do it right, we can create an emotional connection Between the participants or the member of the program and the sponsor and then in exchange for that, we get a lot of data.
And then that data can be used to make sure that the program that’s being offered to the member of the office and the benefits are relevant. The more you can do that, the more you can engage your member, the more loyal to your product. They will be. And the more they will spend, and the more you get feedback.
As to what you need to do to make your product better to keep that customers happier and more engaged. And so it is a very cost effective. Way to drive and remember engagement and to drive better utilization of your products. What are the and you already answered 1 of my questions was the type of industry.
So, I mean, I would, I’d be wrong to say, like, any industry, any type of business could benefit from this in some way, shape or form in your experience. Am I off on that? Very much so. Look, Engage, we focus a lot on financial institutions and hospitality, but every industry does it and it ranges from, you know, if you think about it, if you take a step back, you can have a punch card for your local coffee shop all the way to a major U.
S. airline and everything in between. And so it’s just, it comes in many forms and it’s everywhere and it’s ubiquitous. And when you do it right. It will drive measurable results for your company. What are some of the, what’s the pushback you get when somebody’s thinking about a loyalty program or something else, especially you’re talking to the board or you’re talking to this, let’s say, executive team.
And there’s, you know, obviously, very rarely is everybody going to agree like, right? So what would be the pushback that you’d get? So, so I think the biggest challenge. Historically, this comes out of the marketing department, not the finance, and it’s very, very important that you start with both.
Marketing’s got to execute and drive it, but finance needs to be on board for execution. determining here’s what it’s going to cost. Here’s my ROI. Here’s how I’m going to measure it. Because the challenge is if you don’t do that upfront and if you don’t do that properly, it looks like it’s an expense to the business where the benefits, you know, it’s hard to go, Hey, we spent X dollars on a loyalty program and my sales went up, but I can’t tie the two together unless I did it properly upfront.
So the, so the big one is making sure we have the right financial metrics. And then the rights behavioral metrics that you’re looking for the members and that makes a lot of that makes a lot of sense because then because if you don’t do that, then essentially it’s not going to be tied into the tied into the revenue of the profit of that.
And if they then, how do you make a decision going forward? Right? Yeah, I mean, what happens is, you know, 5 years down the road, there’s a new person on board. And they don’t have the, they weren’t in the conversation the first time and they were like, what is this? Why are we doing this? So, it’s really important that, and look, most companies are much more disciplined and structured around how they run their programs.
And I’m just, and the metrics have got a lot better over my career. Size the company. Talk to me about that. Like, is there, is this good for a small business, only enterprise? Is this like, like, talk to me about that a bit. Look, the bigger you are, the more you can do. Right. You have more data. You have more access to technology and infrastructure to do more things.
And you can also move the needle more. But at the same time, the cost of these, the cost of implementing a program on a small scale or a small retail has plummeted. And so the opportunities exist right now for, you know, for everybody to go, hey, you know, look, I have an ability to identify my customers, keep them loyal, and reward them.
And it’s just how we do it. And it’s not always just points programs, right? It could be, you know, free things, free services that you get for being a loyal customer. People, people just think about airlines and their hotel points and their bank credit card points, but they don’t care. That’s, that’s fair. I feel like those are the ones that many times get our attention, right?
Like, those are the ones on your email or this or that or whatever. Yeah, but Amazon prime is a loyalty program. Yeah. Oh, I never thought about that. Yeah, you’re right. I got you to pay a fee for it. But in exchange for it, I’ve given you benefit for being a loyal customer. And so it comes in many shapes and formats, and it’s very much around what am I trying to achieve?
And if you think about if you’re in the automotive industry, my loyalty program will very much be, Hey, your lease is up, I’m going to give you some loyal customer discounts and some stuff in service. It’s not a high frequency purchase. It’s very different to my credit card loyalty and my airline loyalty.
Yeah, that makes a lot of sense. So when you first go into a company, and there’s gonna be a lot of business owners, a lot of executives, a lot of entrepreneurs that listen to this, and maybe this is shaking up their thought process a little bit, like, does my company need a loyalty company program?
Sounds good. It’s been like a what if kind of deal? Like, how do you start your process? Yeah. You know, those dead dialogues and whether or not it makes sense for a company, like, how do you normally start those conversations very much around cost of acquisition for a member cost of retention and the value of a loyal member versus someone who’s infrequent.
So we start building parameters around. And it’s hard to do this without visuals, but think about a standard bell curve. I’ve got my top customers on the far right, those are loyal, I’ve got to make sure they’re happy. But how do I take that middle big curve? And shift it to the right. And what’s that worth?
And then it’s around what data do we have? What can we track? You know, , what is important to your members? And we go through that process and that helps us design the success metrics and the measurable results that we’re looking for in a program.
And at least then you can build a construct that says, look, we’ve done this here, we’ve done this there. This is what we’ve seen. If we apply it this way, this is why it’ll work for you guys. And then you’re doing a lot, a lot of testing and learning and you keep adapting until you’ve got a working structure that makes sense.
What are some of the the elements or processes or thought processes? I don’t know that you’ve seen that have really made some loyalty programs. Just kind of knock it out of the park. Like, what are some of those? You know, it’s really very much around knowing your members. And making, finding out what’s valuable to them and giving them back.
And so the people who’ve done the best job around it, definitely airlines and hotels. If you think about not your vacation traveler who travels every two years, but your business travelers and your frequent flyers, the status and the benefits that come with status are more important than the actual miles that are earned.
And, you know, hear these stories about people. You know, coming towards the end of the year, going and taking a trip because they are sure to not stay in a hotel to get status for the next year or there. Oh, that’s so true. No, that’s the thing. I’m not in that case, but I’ve had that conversation. You’re right.
That’s a great example. Right. And then, you know, the Canadian pharmaceutical dry store company that has done an incredible job with their data and making sure that the offers that you receive are relevant and meaningful to you. And so, in both those cases, you know, one’s big retail, one’s hospitality, what you see is a structure and a process that drives meaningful value.
To the different segments of their base,
What is the other side of that question? Look like when somebody’s missing the mark, like, is it I would assume it has something to do with like, they’re not giving their client something they want. They’re picking a rabbit out of a hat on, like, what they want or, like, maybe the design of the program was wrong.
Like, I feel like there’s a lot of variables, but. There’s a ton, like the biggest one we always see is expiring of points. Finances, finances are these people aren’t active, let’s expire the points and you always get a negative backlash and all the goodwill you’ve done leading up to that disappears. And so when I come back to Where programs fail is on the, not having the right financial metrics and value proposition and ROI.
And so whenever we see a company make a decision around limiting redemption or throttling the value of points or expiring points, it gives the other and it has the opposite field, doesn’t it? It kind of leaves a bad taste in your mouth. Like, really? Like they’re going to really like I had these points and now they’re gone.
What? Yeah. Right. And they, and, you know, they’ll, what’s your thing, people top seven or 10 people, whatever the number is, bad things and one person good things. So, you know, so that’s why when, you know, coming back to what we started about, understanding the financial metrics are so important because it drives your value, provides all your decision processes around, okay, This is costing me X.
Here’s my return. When I’m struggling, I should actually juice up my loyalty program, not cut. Yeah. Yeah, I see this and it makes, it makes a lot of sense. You just took me down memory lane. I’m not going to call out any brands, but to where I was like, you know, after they did that, I don’t know what it was.
Yeah. And I kind of felt it, but then after a while, it kind of made its way out of its rotation and then I got an ad for something else. My actually that’s okay. Pun intended. That’s not even a pun, but my loyalty went down. I’m working through some things here with you today. Jonathan. I’m fine. Look, it’s never even seen it.
It relevance office. Yeah. Like, I’ve got a program. I also won’t mention names, but I’ve never bought any of their fattening products. And every time they say, Hey, come try this for three straight days and we’ll give you whatever. And I’m like, well, I’ve been buying stuff from you for five years. You’ve never seen me try that once.
Why do you think now I’m going to come and do it three times?
And so that’s where we, right. So that’s why understanding your customer and understanding how to change offers to me relevant is so key. What is it like in this space? Just , as a CEO and running a business, this is a pretty, I would imagine you tell me if I’m off. This is a pretty competitive space, right?
Like loyalty programs and things. Am I off on that? Yes. Yeah, so there’s, look, it’s very competitive. We compete with lots of companies doing it. A lot of customers do it in house. It is a very strange space in that even though we got, there’s a bunch of people competing in the space, we all know each other.
We’re all friends. And so we have a lot of, Competition and cooperation along the way.
That’s interesting. So it’s a little collegial in that everybody, like people know each other and there’s like, I get it, especially, I feel like, especially when going after like big accounts, you work with banks, you work with retail, you work with, so you kind of, at some point depending on, you’re going after the size, these, these sizable companies.
Right. And I, it’s obvious, I’m sure you work with enterprise, but do you work with small businesses or middle market? Our clients are, so we focused on a different product recently. We have built a pay with points network. So the ability to use your points at retail as a form of payment. So a lot of people are familiar with Amazon where you can go into Amazon and you can use your bank’s credit card points at checkout.
So we’re building out a network like that where we can, you know, you integrate with Engage and we can let you use your points at Amazon, at you know, some gas stations and some other retailers and they have a whole bunch of other retailers coming on board. And that’s been our focus as a company for the, that, and I, we have a platform business as well, but you know, the so our clients are large banks, large hospitality, larger retailers, retailers and payment processes.
I get it. So how does the loyalty program work? Like, how does that work or loyalty network? Excuse me. I’m looking at your website. Like, how does that work? So think about if you’re a credit card holder at Acme Bank and you’ve earned all these points today, you know, historically being able to redeem for merchandise, gift cards and travel, maybe cash.
In our world, you walk into a gas station. Yeah, and you tap your card and says, hey, for X number of points, do you want to say 50 cents a gallon or you’re on shopping on Amazon and you go to check out and it says, hey, you have so many points. Do you want to use your points for this transaction? Yeah, and on the other side of that, so then presumably these so the other side of that would be like, that gas station or someone else, they would have had to join that loyalty network.
Am I off on that? Yeah. So what happened, you know, our value proposition to our banking clients is one integration with us. You get all of my retailers. My value proposition to my retailers and merchant partners is one integration into Engage and we get all of our banks. And every time we add one to the other side, the network just keeps, it’s either side, the network keeps growing.
And so it’s, it’s heavy lifting to get going, but once it’s in place, it’s spectacular. Absolutely. What we do see, so, you know, if you think about an hour, well, that’s about 3. Constituents. I have The, the bank or the, or the, or the loyalty program. ’cause we do more than . , we do more than banks now.
Mm-Hmm. . I have the member and I have the retail. So for the loyalty program sponsor, you now have more ways for your members to engage with your program and to use their points on a more frequent basis. So it drives a higher member engagement and higher loyalty back to your product. For our merchant partner.
It drives back to, you know, incremental sales to new customers and a lower transaction cost. And for the member, we’ve democratized your points in a way that’s meaningful and valuable to you. So when you’re going out and you tap your card on the POS and it says, hey, do you want to use your points for this?
You’re like, holy crap, that was cool. I didn’t have to do anything. Yeah, you’re like, I think I will. Thank you. Right? Yeah. And then you, and what we see is a massive, massive uptake of this and a huge member engagement, which drives. More loyalty back to the sponsor and more loyalty and frequency back to the retail.
Yeah, this is great. Well, Jonathan, man, this has been, this has been an education for me and hopefully for my audience as well on loyalty programs, loyalty network, the space in general, the benefits of starting a program for your business. I mean, we covered a lot of ground here. That being said, if somebody wants to learn more about engaged people, I mean, how do they do that or follow the journey?
Thank you. Best way is just engagepeople. com, there’s a contact us happy to talk to people and help out where we can, and when we can’t, we steer you to the right people. Like I said, it’s, it’s a small industry, you know everybody, so we do a lot of, you know what, we’re not the right guys, but talk to these people.
So happy to do that for people as well. Amazing. And for everybody listening, just so you know, we’ll put the links into the show notes so that you can just click on the links and head right on over and check out engage people. com. And speaking of the audience, if this is your first time with mission matters and you haven’t done it yet, hit that subscribe button.
This is a daily show each and every day. We’re bringing you new content, new ideas, and hopefully new inspiration to help you along the way on your journey as well. So again, hit that subscribe or follow button and Jonathan, thanks again for coming on, man. thank you so much for your time and nice chatting with you today.