It’s Time to Invest in Your Loyalty Program
Episode #030: Matt Sebek, VP of Digital at World Wide Technology
June 3, 2019
One of the major challenges facing many organizations today is how to align marketing and IT. In a lot of organizations, these two departments often have an adversarial relationship with marketing complaining that IT doesn’t move fast enough while IT feeling like their business colleagues don’t really understand their workload. And, there is a ton of truth on both sides of that argument. Thanks to technology, marketers have to move faster than ever to stay competitive in the market and the old school approach of handling tech projects internally is often a major challenge to their need for speed and iteration. Take a look at loyalty programs as an example. Many companies have launched a loyalty program at some point, but how often are these programs updated? The answer is probably not often enough due to a lack of resources, but it’s actually one area that needs to be evolving the most for brands to have a competitive advantage moving forward. In this episode of Mobile Matters, we talk to the VP of Digital at World Wide Technology, Matt Sebek, about why marketers need to focus on the customer experience before they worry about technology, how speed-to market matters and can be a major differentiator for your brand, and why having a customer loyalty program is now considered table stakes.
Stephanie's Strong Opinions
- Don’t select technology without fully understanding what you’re trying to accomplish in the customer experience.
- Loyalty programs are key to differentiating your brand now and in the future. Brand with loyalty programs that are highly-personalized to customers will dominate.
- Brands that are able to move quickly and iterate will have a major advantage over the rest.
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Stephanie Cox (VP of Sales and Marketing at Lumavate): I’m Stephanie Cox and this is Mobile Matters. Today, I’m joined by Matt Sebek. Matt is the Vice President of Digital at World Wide Technology where he helps a major brands dream and develop delightful consumer and workforce experiences through human centered design, insight driven objectivity, and the unique ability to understand and eliminate the challenges that exists between the business and IT. He’s been instrumental in creating some of the most useds and highly rated QSR, B2C, and fast casual restaurant visual experiences over the past five years. In this episode Matt and I talked a lot about why you need to focus on the customer experience first and then figure out the technology, how you can convince almost anyone to try a crazy idea if you can show the potential ROI, and why loyalty programs are an extremely crucial component for all brands. And make sure you stick around to the end where I’ll give my recap and top takeaways so that you can not only think about mobile differently, but implement it effectively. Welcome to the show Matt. So, I know that you work at World Wide Technology. So, tell me a little bit about what you do there and what your role is?
Matt Sebek (VP of Digital at World Wide Technology): Sure, I’m the Vice President of Digital at World Wide Technology and it’s, honestly, a company that not a lot of people know a lot about. It’s a $12 Billion privately held company. And just, not to go into too much depth, but it’s a technology company that holds the foundational technology plumbing for most Fortune 1000 companies. They’re sitting in an enterprise office and you have a phone on your desk or you’re connected to a wireless headset or you have data hosted either on PRIM or on the cloud. World Wide Technology probably has something to do with it. We’re the number one partner of major companies like Cisco and NetApp and Dell EMC. And so, really, our company has really grown up on the infrastructure side of the house, helping companies buy and install hardware at scale. But over the last five years, I’ve really helped grow the digital side of the business. So, yeah, I’m sure we’ll get into it and talk about it. But you know while that technology exists in a lot of major businesses, it’s really the digital part of it that consumers interact with. It’s the valuable part of the business that can help differentiate. So we think bringing the infrastructure world with the digital marketing world is pretty profound and we’re doing some pretty cool stuff for our customers.
Stephanie Cox: So, thinking about that, I loved what you said earlier how you bring infrastructure and digital together. And this might sound like a cliche question, so I apologize for asking it. But, what do you think is really the hottest trend that companies may be paying attention to right now, in terms of digital and tech?
Matt Sebek: Yeah, I think as we look at the line or the two hemispheres of the brain, be it, infrastructure really existing on one side of the business and digital existing on the other. I think it’s easiest to think in terms of , you are all bigger brands and experiences. And I think what’s the conduit between both of those sides of the business is mass personalization. And, even that term has become a buzzword, its buzzwordy and cliché over the last couple of years. But, I think that it’s really what’s connecting and driving a lot of the major decisions that we’re seeing in personalization and dynamic segmentation. It’s where all consumers have the ability to speak with brands on a one to one basis, based on how I act. That is the experience that every brand is trying to get to. So, if you start and then realize that every decision you make digitally speaking, whether it’s in the omnichannel world of voice or cloud side, that’s how customers engage. But then you have the infrastructure that’s behind it and the technology partners that really exist underneath the hood. Everything is through the lens of the consumer.
Stephanie Cox: So, playing off that a little bit when you think about technology and marketing and bringing them together, how do you do that you create digital solutions that actually drive results for your customers, but at the same time don’t just implement new tech for the sake of new tech?
Matt Sebek: Yeah, I think it’s keeping it simple. Apple has become focused on the simple principle of, Steve Jobs was big into saying, we focus on the customer experience and then we work with the technology. Not the other way around. I think that we’ve got no shortage of tools and technology and most of them, frankly, are free and have a low barrier to entry. We see so many of our customers just sitting with the technology and then trying to work it into the experience. Where, if it doesn’t solve or the need hasn’t been identified, then how do we know that what we’re creating has value? Where we consult with customers very early on is figuring out what you want to be and how do you differentiate, and then help intersect that with how should we deliver those results? The latter part is really the technology part, but if we’re not identifying a need and the behavior we’re trying to drive, it’s pretty much a moot conversation from the beginning.
Stephanie Cox: So, you just mentioned differentiation which kind of goes into my next thought which is, some of the stuff that you have done with clients has been a little bit disruptive, whether it’s for their brand or for their industry. And you really challenged them to think differently about that customer experience. How do you get a client on board with what might seem like a crazy idea at first?
Matt Sebek: It’s all ROI for us. And ROI can come in a number of different ways. We work with a lot of retail brands, specifically in quick serve restaurants, and it’s a highly competitive space and one of the areas that we’re spending a lot of our time is in refreshing the rewards and loyalty. In ROI, in terms of dollar values, if we could get your customer to your app frequently, there’s a real dollar value placed on that. And so, if you can associate an idea of ROI that makes sense, most boards and CEOs will rally around that. But there’s also a growing influence of a softer ROI. And that really gets into more emotional side. How does a brand make a consumer feel, and what is the language and tone? Knowing that a lot of those softer ROIs can really get into the human empathy differentiation. And when a customer looks at your brand over three other brands that make the same type, how do they feel about it and is that driving the right behavior? So I think we’ve been really big into ROIs. In a lot of the brands and the spaces that we’re dealing with, it’s competitive. For every million dollars that they spend they have to see, what is the return for us? And that has to be defined as either a soft or hard ROI.
Stephanie Cox: So, one of the topics that’s been on a lot of publications, speaking engagements, and at conferences is this idea of app fatigue. And that consumers are getting frustrated with downloading apps and finding value and then, outside of a handful of ones that they use on a daily basis. Knowing that you guys are heavily invested in creating really engaging native mobile apps for your customers, how do you help combat that through the user experience and just even with brands that are thinking about creating a new one?
Matt Sebek: Yeah, I think some of it is fit-for-purpose technology, that’s come up a couple of times already in this conversation. Mobile apps are “the thing”, but it’s one thing and in a pretty vast ecosystem. So, I think that that’s number one. For the problems we’re trying to solve, sometimes a native app is the solution. Sometimes it’s a responsive web app, progressive web app, a voice assistant. It comes in so many different flavors today, which is exciting. If we were having this conversation a few years ago, it would be native mobile app, native mobile app, native mobile app, where there’s a lot of different options now. So I think if we’re only driving customers to download a native mobile app in 2019, there’s probably something wrong. And there are all different ways that we can drive the right type of customer behavior. So, that’s part of it. The other part of it is, I talked about loyalty in the past and I think that doing that is looking at hitting absolutely square in the face. The most well-known loyalty program in the world is probably Starbucks, and even they have refreshed the from the ground three times in the last five years. And the reason they’re doing that is not because the usability of the application stinks, it’s just because customers change and the way that they’re trying to drive behavior is, how do we organize our loyalty program and incentives and promos and limited time offers to get people coming back every single day? It’s come down to that and a lot of times that takes a loyalty or a rewards program that seems to be the easiest way for these brands like that to do it.
Again, I think the differentiation of loyalty programs is already starting. But I think the notion of buy one, get the tenth free–that’s table stakes these days. Where it’s starting to get much more competitive and brands are trying to gain wallet share. I think what we’re going to start to see is interesting and they can earn points and rewards. So, you think of a brand like Panera. Panera does home delivery. They do rapid pickup, which is their version of curbside pickup. And then they do in-cafe dining. There are really three major ways to engage. The brand wants you to come to the cafe and spend a couple hours there. Because they know if you spend a couple hours there, you might not buy lunch but you’ll buy coffee and maybe a pastry and so the ticket size is a lot bigger. And so, the behavior that they’re trying to drive, they should reward people for doing that. And so, if you buy one pastry inside a cafe, maybe that’s worth two times as many points. And that’s within the brand. An apparel company like Nike might connect with various sensors in your shoe and reward the number of miles that you walk on any given week, knowing that if you walk more, you’re going to need shoes more frequently. So, I think where brands are going to get to with their loyalty and rewards program is something that’s a lot more experienced. That will get a little bit outside just rewarding for transactions and purchases of products.
Stephanie Cox: So, one of the things that you mentioned earlier was that WWT is about $12 billion, so you have a ton of great clients. What are some of your favorite client projects that you’ve been able to work on and help really shepherd forward?
Matt Sebek: I mentioned QSR, quick service restaurants, is where we’re spending a lot of time digitally speaking. Simply because it is so competitive. We just fundamentally believe that these are the types of brands that need to move. And we compete against a lot of the major consultancies like Deloitte Digital, McKinsey, and I think our role as consultants is to not deliver a 50 page document that we deliver and say, “well good luck, find somebody else to help you build it or deliver the solution for you”. We want to help advise and then get to work as fast as we can and help these brands bring something to market, a differentiated strategy, as quick as they can. So we have found that that message really resonates in some of the retail brands that are that are looking to move fast. So, in QSR we’ve worked with a lot of well-known household brand names. We’ve got all of John’s Consumer apps. We’re working with Jersey Mike’s, which is the fastest growing franchise in America. We’re currently on a journey with Little Caesars, which is interesting to me, because a lot of their competitors like Papa John’s and Domino’s have been doing online ordering and the omnichannel, and Little Caesars has not. And so, they’re really starting with a small percentage of their sales going through digital mediums. So, I think it’s a super interesting problem to solve where, they’re the home of the five dollar pizza. It’s incredibly convenient and accessible for most people but it’s five dollars so they deal a lot in cash. So, how do you design a digital marketing strategy or a loyalty app for a business that is working on five dollar transactions? So, again, an interesting space where a lot of growth and innovation is happening so that’s probably where my favorite stories are right now.
Stephanie Cox: So, one of the other things I know about you is that you’re a big sports fan. So, can you tell me a little bit about how sports and technology intersect and really what your thoughts are and what can happen when the two of those are intersected in a really beautiful and compelling way?
Matt Sebek: Aw man, we could do a whole podcast just on this! I love it. I love sports. I played soccer in college. And it’s always an amazing technology field. So I was a huge baseball fan growing up, the St. Louis Cardinals are my team. Yeah, I just think it’s an area that’s coming to tech. I think in tech, everyone’s looking to build the next platform or the next social channel. There’s something ingrained in all of us about sports that if I sit down at a bar and see someone wearing a Cardinal’s hat, we can strike up a conversation immediately. So there’s this ingrown network that already exists and this commonality that just cuts across ethnicities and barriers and state boundaries. I think it’s just really cool. The other part of it is sports centers get smaller and smaller to an area where we can collect a lot of data, from heart rate to blood pressure to number of touches on a soccer ball, and communicate that with fans in rich and compelling ways. So, I just think sports are an interesting area where we started to tap into statistics and what we would expect. And put it in a digital format. But I think we’re just very, very early–have barely scratched the surface in what’s possible with sports and technology.
Stephanie Cox: So, if we think about retail for a second. One of the things that’s been interesting is there’s been this big push for e-commerce and digital experiences. But, at the same token, a lot of people don’t realize how many people are still going to the stores on a weekly basis. So how do you think about retail brands and balancing engaging e-commerce experiences while also not losing track of what their in-store experience should look like? Because, honestly, customers expect to have a consistent experience, regardless of the channel that they’re using.
Matt Sebek: For sure. And every Christmas that comes around is the retail apocalypse. It’s fun to keep our eye on it, for sure. But as you said, this is where the United States is a little bit behind Europe, where Europe sees way more transactions digitally than in store, but in store still makes up for about 75 percent of transactions in the United States. So, that percentage will continue to decline. I think where most brands have landed is realizing their retail location, their brick and mortar, so we have to reshift investments a little bit to make sure that those retail centers get better today than they had to a couple of years ago. It needs to be more experiential. Like curbside pickup better, which is a huge operational issue. Customers may buy online but return in store. So, how do you handle reverse logistics? And how does digital signage play into the whole welcoming of consumers in a rich and compelling way? There are a lot of very interesting conversations that we’re engaged with. And of them, we’re figuring out really what is the purpose of their brick and mortar locations now, because it’s not the same as it was five years ago, and it won’t be the same five years from now.
Stephanie Cox: So, if you had the opportunity to talk to all consumer brands in the world and give them one piece of advice on something they should all be doing tomorrow–well, today and tomorrow–what would that be?
Matt Sebek: Oh man, I think this is somewhat tricky. That’s something every brand that we engage with big and small deals with and that’s the silos that exist within the technology. There are people primarily in marketing parts of the organization that have significant, game changing ideas because they’re the closest to the consumers and they’re looking at the data and they know how the brand can move. And then you have people in the technology side of the house that could embrace those ideas and quickly create solutions that are equally as game changing. But most of us know those two sides of the organization are far apart and they speak different languages. They may not even be in the same city. I think the way to bridge that gap either through internal process or knowledge sharing or something like WWT that can help bring that together is. Ultimately, speed is the name of the game. Those types of friction points prevent organizations from moving forward.
Stephanie Cox: So, when you said that one thing that maybe came to my head was this idea of especially when I was little, my brother and I would fight. My mom would put my dad’s t-shirt on us and make us both when we were little be stuck together and used to call it the “get-along shirt”. And that’s what it reminds me of, is how much do marketing and IT or other technology parts of the organization have this ongoing love hate relationship? We both need each other but marketing thinks IT is never fast enough, and IT thinks marketers understand how long things really take–which we don’t, let’s be honest, we don’t. Or perhaps we don’t care. But, how do you think organizations can start to better align those priorities? Is it by working with third parties? Does IT and marketing ever come together and we just call it digital? I know there was this rise of Chief Digital Officers for a while, but most of them sat in marketing and not really IT, and I think they had some of the same problems. What do you suggest that companies do when they think about that?
Matt Sebek: I think the Chief Digital Officer was one that was designed to sit deliberately between marketing and IT and I think we are going to see that rise. I also think we’re going to continue to see, whether it’s computer science people being hired at marketing roles or vice versa, that there are digital natives that are now of the age of senior marketing positions that could take the role of CIO and do something a little bit nontraditional. I see that happening more often than not now. And I think the other way that we’ve seen success is in an organization, so that you don’t really have two hemispheres of the brain. You really have the customer point and, if the organization as a whole says, all right, number one priority this year is we’re going to revamp our loyalty program, to not have a marketing side of the house, and an IT part of the house but to vertically stack it so that you have effectively a product owner that is writing requirements, doing the market research, defining the ROI. And then you have technology people tuned in directly to that and they’re engaged in weekly agile sprints to deliver a capability. I think that’s really more of a process shift in organizations. That’s hard to do.
Stephanie Cox: Has there ever been something that you’ve implemented that you thought was going to work and it just failed miserably?
Matt Sebek: Miserably, no. Failed, yeah, all the time. We’re big believers in agile development, which I referenced earlier, is just this idea that what customers say versus what they do can often be two different things. So delivering stabilities iteratively so that we’re constantly getting feedback either in person or through data that tells us what I know. I know this customer told you that they would use wayfinding inside a grocery store to find every single item on their shopping list. That sounded really good as we went through some discussion with customers, but actually, when we rolled out an early sampling of this technology, we found out that customers in the grocery store have two hands on their cart and they’d never had their mobile phone out. There’s all types of those learnings that we hit pretty frequently. The point of it is, let’s not go 3–6 months without testing software. Let’s go maybe a week before we get something in our user’s or our customer’s hands so they can give us feedback. So, back to your question, we’ve been wrong plenty of times but we’re only going to be a week or two wrong and not six months, which I think is really important.
Stephanie Cox: I agree. Thinking about mobile and the future of mobile and where it’s headed, if you had a crystal ball, what would you tell me it looks like in three to five years with how brands are engaging with consumers on mobile?
Matt Sebek: I’m beating the drum of this, but loyalty, again. I think the way loyalty works is, every brand that you interact with, it’s going to be table stakes to even have a loyalty program. And in three years, it’s going to be super, it’s going to be dynamic. So, really what I mean by that is, we all use a loyalty program like buy nine sandwiches, get the 10th free. Some of them are the more points I earn, I move tiers. And as I get to the top tier maybe I earn free shipping and returns on everything I buy. In the next three years, it will be based on my behavior or the behavior of other people like me. These loyalty programs will be dynamically created for me and that may change over time. Case in point today, it’s Monday I’m at work. I don’t have time to go sit in a restaurant. I don’t have time to shop online, so the way I interact with brands may be totally different than on the weekends when I’m at home with kids. So those loyalty programs and the ways that I engage have to have to change them based on the variables in my life. And I think that’s a pretty significant shift. If we go back to brand imitation and persona development that marketers are familiar with, we’re meant to say no, Matt is a 30 year old. He lives in St. Louis, Missouri and he likes sports. So here’s how we should treat him. I think a lot of that is just old. My behaviors change on a daily or even hourly basis. Brands need to keep up with that dynamic nature of my life.
Stephanie Cox: I completely agree.
During my conversation with Matt we talked about one of my favorite topics, the ongoing battle between marketing and IT. I’ve seen that at almost every organization I’ve worked at and I have colleagues in both IT and Marketing at other companies that have seen it as well. In today’s digital age it has become a major limiting factor for growth for companies because speed to market is often crucial. So how have new marketers handled this? By asking forgiveness rather than permission and bringing on new martech without getting IT involved or outsourcing projects to agencies to circumvent the IT backlog. I get why marketers do this, I have done all of them myself. But I think it’s important for us to realize that the load that IT departments in most organizations carry and how that significantly impacts their ability to tackle marketing related projects. With that said, IT also needs to realize the demands that are put on marketers today are enormous and constantly changing. It is no longer possible for us to wait 6 months for a project to get done. We need to move fast as possible and the ability to iterate as much as possible because consumer behavior is constantly changing. And that is what the idea that Gartner calls citizen developers excites me so much. It allows IT to select platforms that have all the security and management IT needs, but enables a business to actually do the work on these platforms. so they can move at the speed of the business. In fact Gartner forecast that by 2020 at least 70% of large enterprises will have established successful citizen development policies. I believe that this will ultimately solve the ongoing love-hate relationship that exists between marketing and IT today and I personally look forward to that. Now, let’s get to my favorite part of the show where we take the education and apply it to your business.
There are so many great insights from my conversation with Matt that can really help transform how you think about marketing. Let’s dive into my top three takeaways. First, we all can get enamored with new technology and finding a way to integrate into our business. Think about how many times you’ve seen another marketer share their tech stack on LinkedIn and you find yourself almost immediately Googling about one of their tech providers to learn more. I get it. We all know technology can help us dramatically improve our business, but technology alone isn’t the answer. Instead we have to understand the problem we’re trying to solve and that means starting with a customer experience first. Figure out your customer wants and it may not always be exactly what they say they want and then think about how you can improve the overall customer experience. Then take the time to find the best technology that can help you achieve it. Customer experience first, then technology everyone.
Next, if you don’t have a loyalty program or if you’re not constantly evolving it then you’re significantly behind already. Traditional loyalty programs where you by 9 and get the tenth free have become almost table stakes for all brands today and are becoming a major differentiated with consumers. Think about your own buying behavior? How many loyalty programs do you belong to? How often do you choose those bands because of their loyalty program and your desire to stay tied to a single one to gain more rewards. The easiest example is Airlines, You probably have a favorite airline you choose to fly whenever possible so you can accumulate points on a single airline rather than traveling on whatever airline has the best route, cheapest price. I know people that would actually rather take a flight with a layover on their preferred airline than a non-stop on another and the same goes for other industries such as clothing, food & more. Loyalty programs that continue innovate and become more and more personalized to consumers are one major way brands can be able to outshine the competition.
Finally speed-to-market matters, everyone. The brand’s that get there first and do it well, I’m A major advantage over the rest, but this means your organization has to step up to move quickly and I’m not talking about taking numerous months to launch an initiative. I’m talking about the ability to rapidly iterate and get a new future to Market, see real-time feedback and constantly make changes to improve the experience. No first iteration is ever perfect and with the speed at which consumer Behavior changes, there’s a huge advantage to moving quickly with the ability to iterate often.
Now, here’s my marketing challenge for the week. If you’re a B2C company and you don’t have a loyalty program then stop what you’re doing right now and start initiative to get one launched. If you already have one and you haven’t updated in the last 18 months, then it’s time to think about some enhancements. Dig into the analytics of the program and your overall customer behavior. I bet you’ll find some opportunities to enhance it. And if you’re a B2B company, don;t assume a loyalty program isn’t for you. It may be rare to see B2B companies talking about loyalty programs because we tend to think about referral programs instead, but you’re still selling to people and you might be surprised how a loyalty program can actually help your business.
I’m Stephanie Cox and you’ve been listening to Mobile Matters. If you haven’t yet, be sure to subscribe, rate, and review this podcast until then be sure to visit Lumavate.com and subscribe to get more access to thought leaders, best practices, and all things mobile.