Engaging Audiences: Strategies for Loyalty, Personalization, and International Growth w/ Joel Steel | builders podcast

0:00Every brand across pretty much all industries, they need and want the same thing. and we're solving the same problems. It's all around engagement. It's all around cutting through, providing value, collecting data, doing something meaningful with that data and driving revenue.

0:20In today's episode, I speak with the CEO of Como. His name is Joel Steele, and we discuss the latest in customer engagement and loyalty and meeting customers in the moment. It's a really cool discussion. And our first segment is with business.com editor-in-chief Marty Beckerman, and we discuss the growth of independent bookstores in the United States and why small talk in the office can be a good thing.

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1:57as always talking with marty beckerman editor-in-chief of the b newsletter free at business.com and one of the things you're writing about this this week made me think of a movie you've got mail it's probably 20 years old and the premise is the indie bookstore is being taken over by the big bad Barnes and Noble or Borders or whatever it was. And then since that movie almost seemed antiquated because the story then shifted to those stores being eaten by Amazon and online retailers. But now I guess the indie bookshops are having their place in the sun again. Yeah. I actually really miss Borders.

2:35Borders is a great bookstore. But for years it looked like physical bookstores were going under. The Kindle was super popular, e-books. People were just reading less and less. And then in the past few years, physical retail has really come back, both for bookstores, which are up from 1 ,700 to 2 ,000 indie bookstores in the past four years. They're actually growing. BookTok on TikTok is huge. Young people are really into reading and talking about books, and they're going to their local stores to find them. Also for record stores because of vinyl. CDs were going out. No one was listening to physical music.

3:15Everyone was listening to Spotify and streaming. And suddenly vinyl came back. And even cassettes are up 28%. For some reason, people are buying cassettes again. I get vinyl because it sounds better, but cassettes always sound like trash. Yeah, it's crazy to see this renaissance. I wonder how much of it is hands-on nostalgia or maybe people later in life want a second career owning a bookstore. How do you think about this trend, given that you're a published author, published novelist, have written seven books? It's great. I mean, these are community hubs. They're places where people who love books can get together.

3:53It's just funny because for so long, Barnes & Noble was the enemy for authors because they were eating up all the small bookstores. And then Amazon started eating up Barnes & Noble. It's like, oh, we have to save Barnes & Noble. They're the closest we ever get to an independent store. But really, it seems like the cause of this is partly people were locked up during the pandemic and lost that sense of community. And they want to find that against. They're finding it in readings and events at local retailers. So local retailers have an opportunity to help build community. capitalize on stuff in real life and also getting recommendations probably to go in.

4:34You ask somebody at the store what they like to read and you buy the book. Sure. I mean, the algorithm can get you so far with recommendations, but I kind of feel like Spotify is always playing the same 10 songs for me over and over. I want to hear something new. Yeah, that's true. Something else you're you're covering is what people talk about in the office, you know, small talk, gossip, whatever, and what's actually a good thing. So maybe let's start with small talk. Right. This is our organizational psychologist couch segment. And Dr. Steven Rogelberg is citing a study that followed 150 on-site employees for 15 consecutive days and found that offices where people have small talk where they have that water cooler conversation, even if it's just about sports or TV shows or the Oscars or whatever.

5:25People help each other out more. They feel more positively. But he's careful to note that small talk isn't office gossip. It's not complaining about your job or your boss. It's not malicious or negative. It's really got to be sort of neutral. How's the weather? How about that local sports team? And a super interesting finding from that study is that both introverts and extroverts had those positive effects. You would think introverts wouldn't like small talk, get away from me. Once they were actually in the midst of these banal conversations, they felt better. That's great. Thanks, Marty. Thanks a lot, John.

6:10I'm speaking today with Joel Steele. He's the CEO of Como, and we're going to talk about customer engagement and loyalty, which of course are critical parts of growing any business. Hi, Joel. How are you? Very well, John. Thank you for having me. Yeah, of course. Thanks. Thanks for being here. So when I think about that subject, customer engagement, loyalty, I know it applies to every business, but I think about some of the things that I'm most loyal to like airlines and hotels. I think about my points or a retail store that I go in or my family goes into like Starbucks or Nordstrom. I know you think about this more broadly and applying it to all kinds of companies and businesses.

6:47What are a few other brands and industries that we might not think of that really invest in customer engagement and loyalty? Well, look, I think, as you say, it's, you know, we deal very much on an industry agnostic sort of level. And if you separate loyalty and engagement, because yes, they do play very closely together. The loyalty side, I think the secret sauce comes from brands that can provide those instant incentives, discounts, rewards that are relevant to their own product or they are actually their own product or service, the ones you mentioned, the retail, hospitality, restaurants, coffee shops, the simple side of loyalty, being able to stamp a card and once you get to 10 stamps, you get your free coffee.

7:31Those types of things make a lot of sense. But then if you take a step outside of that and think of things like your banks, your credit card companies, offering cashbacks, rewards points, incentives like that, and then doing the partner programs. A lot of these banks and credit card companies are partnering with the likes of Alive Nation these days to offer these passion point rewards so they can connect their brand with music and movies and other entertainment products, which are a lot more exciting than your bank or your insurance company or your credit card. So I think banks, credit cards, insurance is probably something that you are probably participating in those programs all the time but you wouldn't necessarily put them in the same bucket as say a hospitality or a movie theater or amusement park for example yeah and those those aspirational or experiential uh purchases are probably things that that maybe certain types of consumers are really stoked about and they connect with it more than you know you're getting a sent off here or a sent off there correct correct i mean it's um the great thing about the like i guess it is as you say the aspirational side of things it's the chance to to win a vip pass to your favorite um yeah musician or something like that and you might be able to use your reward points i'm a member of a core i'm a big points fan traveling a lot um member of a call and i just got something this morning actually and it said use 15 000 of your points to go into the draw for a vip weekend away on some island um so i haven't seen that before that's cool i know it's actually the first time i've i saw that one as well and it's like so you're using your points to enter the draw it's a great way for them to reduce your points balance as well because that's obviously sitting on their balance sheet um so yeah that was it that was a new one.

9:32It's this aspirational reward, which I'm using my points to even have a chance of getting there. I don't even, there's a very, probably a limited chance or win, but there is a chance. Yeah, that's really cool. Well, I have so many questions about this topic. The point of the podcast is about building, and I want to go back and understand how you built your business. So maybe you can talk about the beginning. When and why did you decide to found Como? I know you have a large platform now, but at the time you started with just one product. Maybe talk through that, when it happened, and the genesis for starting the business.

10:14Wow, how long have we got? I think you only said half an hour. So I founded the company out of Perth in Western Australia. You'll get the Australian accents obviously probably coming through. But Perth is literally the most isolated city in the world as far as its proximity to any other major city. So trying to build a global tech startup out of the most isolated city in the world has its own challenges, hence lots of travel, always in Sydney, Melbourne or here in the States now. but if we take a journey back 10 years the original idea was the company name originally was quiz aid so and with the quiz in the name it was all around quizzes and gamification but quiz aid was designed to help not-for-profits and charities raise funds and awareness for their cause using mass multiplayer trivia games and gamification and leaderboards and points and play to wins and rewards etc it was going to be it never actually got off the ground but it was going to be a a native app so an ios and android application now it didn't get off the ground because at the time and i haven't checked this lately but apple would not allow you to unlock features in an app via a charitable donation so they had all sorts of problems with other instances in the past, I believe, where an organisation was saying they were taking a charitable donation and then they were holding that money and supposed to be distributing that back to the charity.

11:57And I think someone somewhere stuffed that up for everyone else. So Apple put a stop to that and that put a whole lot of roadblocks up for that idea. So we quickly pivoted to Quiz Jam and it was the same principle. It was mass multiplayer trivia games. It was then just how did brands better connect and engage with their customers, with their audience. We worked across a multitude of different industries from professional services companies like Ernst & Young, banking to major sports teams and we were basically sending all of these different communities to the Quiz Jam app where they could participate in all these mass multiplayer trivia games playing against thousands of people to be crowned the world's biggest fan of something, for example, to win all sorts of prizes.

12:50Now, that was going quite well for a number of years and very much Australian-based. We were number one on the App Store multiple times and we were getting quite good traction, But we always had this desire and, I guess, need to become more of a SaaS-based platform. And in all honesty, our revenue was quite lumpy. And we were taking on investment and lumpy revenue with investors breathing down your neck doesn't sit too well. Tell me about it. We needed to get to a more sustainable revenue path. And obviously with the multiples that you can achieve with a SaaS platform, that's where we were headed.

13:36So that was always in the back of our minds. But the real change came from the end user and our customers. So end users want the time to value to be instant. So for let's just say the PGA of Australia, the golf in Australia, if they advertised one of our games on their Facebook, for example, they'd get a huge amount of clicks. Everyone wanted to prove their fandom, who's the biggest Tiger Woods fan or whatever it might have been. They would be tagging their friends and all that great stuff. From the click to actually downloading the app and playing the game, there was like a 70 % to 80 % drop-off because people just don't want to have to download an app or to engage with a quick piece of content or they want it to happen.

14:26They need to be engaging literally within seconds of tapping. So time to value wasn't instant and it needed to be, and that's getting more and more prevalent these days, as you know. The other major issue that we were facing is that our customers, they wanted their customers to be engaging in their ecosystem. So we had the app. The idea was to bring all the different communities in and they could all feed off each other. Now, it sounded good to us, but, you know, the biggest brands in the world wanted their customers engaging on their websites, in their apps. So we took all of that learning and we took a bit of a risk.

15:06I mean, looking back on it now, it was a big risk. we basically threw the app in the bin while it's sitting on a shelf somewhere behind the scenes. But we took all the learnings away from that and we built the very start of the Como platform, a web-based solution, a web app which can be embedded anywhere our customers are and anywhere their customers are. Now, we were still called Quizjam at that point, but we wanted to build out this more of a platform solution and we always wanted to get to an enterprise level. So we were building out different games, ways to connect and engage with different audiences, always with this view of being industry agnostic as well.

15:50So if we were to build a product or a feature or a game for sports, how can that be used in the entertainment world or how could that be used in the shopping centre world or retail, for example? Because we were building out this more of a platform solution, we changed the name to COMO because we were very much getting pigeonholed into just being a quiz-based platform. Then COVID came. So, you know, everyone's got a COVID story. And our COVID story, it was quite dramatic at the time. So I'd spent a bit of time in the US leading up to COVID, coming back and forth five or six times. and we did have a really major focus on sport and entertainment at the time, mostly in sport, and we're trying to make our big break.

16:39We'd just been approved by some major sporting leagues. We just had our big break, what we thought was going to be our big break, into the NBA and the NHL. I was flying from Perth through Melbourne, Melbourne through San Francisco, moving on to Toronto, all in one trip. It takes about 30 hours. and I'd landed in San Francisco, turned my phone on and it just blew up with messages and missed calls and voicemails and I'm just like, what the hell is going on? I'm walking through security and all of a sudden I see, you know, you see those in the airports there's like 50 TVs all together and then all of a sudden, I don't know if you've seen it before, one image just takes over the whole 50 screens.

17:25Oh, yeah, press conference of some kind. Yeah. That was Donald Trump's head. And I was just going, what's going on? So I'm on the phone and sure enough, the NBA season had shut down whilst I was in the air from Melbourne to San Francisco. And we were supposed to launch the next day for our first in-stadium activation with an NBA team. So it was a literal sliding doors moment. I was at the gates. The stewardesses were saying, Mr. Steele, are you coming on the plane? We're going to Toronto. You're last on. Are you coming? and I was on their phone back to Australia, and they were like, no, get home.

18:01We don't know what's going to happen. You know, if you go to Toronto, you might get stuck there. I ended up staying the night in the airport. It took me about 70 hours of travel, flying, and didn't leave an airport, went all the way to the US, didn't leave an airport, went back to Perth in Australia, had to do two weeks of lockdown in a hotel. but all sort of with this huge problem to solve as to you know what are we going to do with this technology now because a lot of it was built around in stadium live events live experiences yeah live experiences and that didn't exist who knows when it's going to come back that was the real um that was the turning point for the business and it's the best thing that could to happen to us because it made us take the blinkers off this sport.

18:57And, you know, I'm a huge sports fan and sport is sexy, it's fun, and it definitely has its place. And we can talk about this later as well. It's the halo effect and it definitely helps drive more trust in the market for other industries. But if you are just focused on sport, depending on what you're doing, obviously, it can be a distraction. So what we worked out is that every brand across pretty much all industries, they need and want the same thing. And we're solving the same problems. It's all around engagement. It's all around cutting through, providing value, collecting data, doing something meaningful with that data and driving revenue.

19:40and since then we've continued to build out the enterprise platform we have today trying to differentiate ourselves from there's lots of competitors out there that do similar things to what we do but we very much have taken an enterprise lens to this so that it's an always on engagement solution to add value across the whole customer life cycle not just in a moment but how do you connect and engage continuously, collect data, learn from that data, drive a more personalized experience, and integrate into the existing MarTech stack that an enterprise brand would have. That's an amazing story. And as far as the COVID story goes, that's one of the top ones.

20:27Wow. Yeah, it was scary. Yeah, yeah, yeah, yeah, I bet. And what you're talking about, you know, I'm the biggest golf fan, I'm the biggest hockey fan, whatever, and what you're talking about with gamification, like it really easily connects with me. um and and maybe you can give an example of whether it's a specific company or specific industry and the types of things they're trying to do to capture data in the moment and make better decisions on it just so that we can have a reference point outside of sport there's a couple examples one i'll give you with uh one of our customers um so we work with um new york comic con um and obviously that's a huge passion point there right and this all works this all works uh if you can connect with people about things they're passionate about even if your particular brand isn't a passion point like an insurance company for example but you'll find all the banks and insurance companies are sponsoring the passion points right so you know the big sponsors of sports and entertainment but if you think about a a comic con being able to connect with their audience leading up to the event so in that ticketing transaction moment how do we provide more value from from that moment why can't the experience extend from just the two or three days of a fan convention to when someone initially decides that they actually want to go to that convention or it could be a music festival like two or three months out how do we add value from that transaction moment all the way through to the actual event and use things like simple things like trivia or ways to generate user-generated content or the other 50 or 60 games that we have in our platform, but then have them earning badges.

22:22And if you earn badge one all the way through to badge four or up until the actual event, you unlock the ability to have a VIP experience at the actual event itself or unlock a branded reward. It's also a great way to bring brand partners along on that journey as well and do it in this sort of non-intrusive way. And if you can do all of that, and I think non-intrusive is something that we speak a lot about. So how do you non-intrusively collect data, obviously first-party data, but importantly zero-party data? So, you know, data that the end user is knowingly and willingly supplying to you so that you can provide them a more personalised experience.

23:05Now, it's extremely important that you actually do use that data in that way as far as if they're providing you with that, it's in your best interest to actually use that data to provide that better experience for them, whether that is in personalised content, whether that is in personalised rewards. but the personalization needs to come after they provide you with that data. You know, one of the common threads I feel like I'm hearing is that I, as the user, am getting something that maybe I can tell my friends about. I got the VIP experience. You know, I have achieved something in some way. I know you're not a scientist, but is there like a psychological aspect to this or is there research that sort of shows more affinity when you engage on a program the right way?

24:02Gamification and engagement is all built around this concept of intrinsic motivation. So this is where people are motivated, like you're saying, for internal rewards. And when I say internal rewards, so not getting a free cup of coffee, it's that internal sense of achievement, proving your fandom, taking on your friends, that social proof, or just simply enjoyment. So the live trivias that we speak about where you're taking on millions of people around the world and you're proven out to be the biggest fan or the biggest fan amongst your community and your friend base, that's that intrinsic motivation that can keep people coming back.

24:46And gamification enhances that through points, leaderboards, badges, clear goals for the end user so that they get that sense of accomplishment. And I think that's what you're talking about. Totally, yeah. What types of things should you not do with these programs? I mean, something that comes to mind, and I know this isn't exactly what you do, is I go to a business conference and I check in and say, download the app. Download the app. and it's an immediately kind of a turnoff for me because I've got the agenda on the website. Stop telling me what to do. Yeah, yeah, I can connect with people here over LinkedIn.

25:27Like, why are you trying to force me to do something? So I'm sure the intent of that is to build a relationship with me. So what's like your checklist of don't do's or it's doomed to fail when you think of things this way? Your example there is perfect because in those situations, they're obviously not providing you with enough perceived value for you to go through that process, right? So I guess that's number one is if you're going to ask someone to do something that is going to take them time and effort, make sure that the value is clear. the other thing which comes to mind especially in like loyalty programs is over communicating with irrelevant comms and offers so i mean there's huge stats out there depending where you look you'll find slightly different ones but anywhere between 60 to 75 percent of loyalty members globally are disengaged meaning they haven't engaged with that program for 6 to 12 months and that is because of its repetitiveness.

26:46We'll cut that bit out. I got your repetitiveness. Repetitiveness. You know, static engagement activities, doing the same thing over and over again or just no engagement activities and it's just, you're just pushing messages out there and just saying, come back, buy this, buy that, 50 % off, 20 % off, buy one, get one free. You're always just asking for them to do something but you're not providing any real value. So continually asking to come and buy and come back to shop, that's not going to work. Providing value and having that sort of slow sell or, again, non-intrusively trying to sell. There's some other data that we've been working on through our platform where if, let's just say, there's a 15 % off sale, It doesn't matter what it is.

27:39And you want to send that to your member base, 15 % off this piece of clothing. If you just put them in an email with the subject line, 50 % off this shirt, pretty low open rate. You get a pretty low redemption rate, and that's why 70 % of members are disengaged. If you were to put on there, scratch your way to up to 25 % off or up to 50 % off this shirt, open rates increase dramatically. People are actually jumping on. They're doing their digital scratch and win. 99 % of them could still win the 15 % off that you're going to give them anyway. 1 % could win 20%, 25 % off. All that can be obviously set up.

28:21But the fact that they're getting in there, they're playing, they're earning, they're having fun, they've got a whole new outlook on that brand because you're adding value. even if it is just a 30-second quick little game. And because they've earned it, they're actually more likely to use that reward. That's really interesting. So it's not just open rate, it's redemption rate. And I like that you're getting that endorphin rush when you're engaging with something. That makes a lot of sense. How much do you recommend in that case or how much do you or your clients think about the fact, to use the shirt example, how many people have bought a shirt or is it a men's shirt or women's shirt or is it a type of shirt and I should only send this to certain people?

29:06First of all, you need the data to be able to make these decisions. But if you've got the data, you want to be able to be segmenting that data, understanding as much as you can about your customer base and then taking the time to send the personalized offers and messages through your whatever CRM or CDP you're using. So I think the personalization of the content and offers is probably one of the most important things in this day and age because customers just expect so much from brands. If you're sending a piece of content that's not relevant, if you're sending an offer that's not relevant, they're not just not going to use it, but it's also leaving this bad taste in their mouth as well, which if you do that too many times, they're going to be looking for other places to shop.

29:53Yeah, I agree with that. And related to that, what's the right way to collect information? Like in that example, you'd need to presume to know whether I identify as man or woman. You need to know, maybe you need to know my age. And so the more you ask for information, the more precise you can be, but also potentially the more of a turnoff. How do you think about that? Look, there's a lot of obviously third-party opportunities to gather that type of data, but the way we encourage our customers to collect this type of data, which is zero-party data effectively, is by adding value. It's by creating content that people are willingly and actively providing it to you.

30:46So we have a feature in our platform called Progressive Forms. So you might be engaging with Brand X for the next two months and each week they're providing you a new piece of content, a game, a competition, some way to engage that's adding value to you. Through that experience, non-intrusively, you're getting asked a market research question. You're having fun. You're getting the value. So you're actually answering that and you're moving on and you continue through the process. All of that data is then captured and put against your profile, can be sent live back to a sales force or whatever it needs to be sent back to, and then segmented.

31:28And then that's the real, that's the gold there. It's, yes, you can communicate to them because you have their first party data and you need that kick things off. But how do you then add value, engage, and collect really rich data so you can continually enhance their journey over time? That's how we try and put – that's the path we send our customers down. I totally buy that. And I wonder if there's also a part about being authentic, about why you want the data. Like there's a radio show I listen to and the host says, hey, I have a survey I want you to fill out. And the survey is so I can give you advertisers that you want to listen to.

32:21So I think that's really interesting, too. Outside of sales, because that's really the ultimate metric for any business. When you think about customer engagement and loyalty programs, like what's a real metric? other than sales, something that someone should go for? And then maybe what's not real or what's a metric that might distract someone that you really shouldn't be focused on? There's so many different things that can and should be measured around engagement and loyalty, things like retention rate of your customer retention rate, repeat purchase rates, your average order values, are they going up because the engagement rates are going up?