For brands with loyalty programs, customer interaction is an integral part of the total customer experience. Brands benefit when their programs are easy to join, and customers can effortlessly earn and use rewards.
vPromos works with clients to minimize barriers to program participation by simplifying the loyalty experience for brands and their customers. Loyalty360 spoke with Peter Vogel, Chief Revenue Officer at vPromos, about how payment terminal technology can improve program performance, facilitate customer communications, and open the door to innovation.
For brands with loyalty programs, customer interaction is an integral part of the total customer experience. Brands benefit when their programs are easy to join, and customers can effortlessly earn and use rewards.
vPromos works with clients to minimize barriers to program participation by simplifying the loyalty experience for brands and their customers. Loyalty360 spoke with Peter Vogel, Chief Revenue Officer at vPromos, about how payment terminal technology can improve program performance, facilitate customer communications, and open the door to innovation.
Hello and welcome to another edition of Loyalty Live on Loyalty 360. I'm John Diether. In this series, we talk to the leaders in our industry about the technology, trends and best practices that drive unique experiences, engagement and, most importantly, customer loyalty. Loyalty Live gives us deeper insight into the state of customer loyalty. We use these sessions to drive pragmatic, evidence-based solutions to the challenges brands face and identify opportunities to advance the field. Today we have the pleasure of speaking with Peter Vogel, Chief Revenue Officer at vPromos. Peter, welcome to Loyalty Live.
Peter Vogel:Thank you very much. Super excited to be on. I've been a fan of Mark and the organization for, I think, almost 10 years, when I first heard about it, so I'm excited to be on with you.
John Diether:Awesome. It's nice to meet a fan face to face. Peter, can you tell us a little bit about your background and how that led to your current position at vPromos and what actually you do for the firm?
Peter Vogel:Sure, so I'll start with my role there. So, as you mentioned, I'm the Chief Revenue Officer and they brought me on about six months ago and my primary responsibility is to bring up our enterprise kind of client roster. So I'm out there right now targeting all of tier one, tier two, restaurant and retail so the very biggest chains in the world with hundreds or thousands of locations. Those are our primary prospects and customers and they brought me on because in my background I have been a co-founder of several loyalty companies. I've been brought on by several companies to help them grow at a very early stage.
Peter Vogel:One of the last companies I was a part of was one of the first card linked networks ever, called Empire, and that was back in around 2013, 14, 15. We built the first ever card linked network where, instead of just showing card linked offers to your own audience, we went out and partnered with people like RetailMeNot, Yelp, Coupons. com, Rewards Network a lot of the biggest kind of organizations out there with loyalty programs and we built that up. It got acquired by a company called Augeo, which renamed it FIGI, and then it got acquired by Chase. So that company that I helped co-found got acquired by Chase and we also worked with a lot of Fortune 500 brands at that company. So what I'm bringing to vPromos is the experience that I've had with a lot of these tier one and two clients and also in overall strategy of building up a company from really startup phase to exit.
John Diether:Well, for folks who might not be familiar with vPromos, what exactly does the company do for your clients in order to support brand loyalty?
Peter Vogel:Great question. So the thing that makes us most unique, you know. As you know, there's tons of loyalty companies out there who can run programs. One of the things we do, though, is we do all of our tracking through the terminal actually. So the payment terminals we work with, the Android payment terminals primarily. Some of the big makers are people like Pax, and in Genneco and Verifone, and what
Peter Vogel:our program does. It's different is it doesn't rely on asking the member for their phone number every single time. You know typical loyalty program. You go in and they ask oh, are you a member with your phone number? Half the time they forget, half the time you forget you're in a program. So what our program does is it uses the terminal as a tool to enroll you. So when you stick your card in, the terminal will say hey, it looks like we don't recognize this credit card. Would you like to add this to your free loyalty program and start earning rewards? Today?
Peter Vogel:It creates a token. It does ask for a phone number at that point and you click yes, I want to join. And then it also asks you if you want to get text messages with special offers, bonuses, etc. So you're getting opted in TCPA compliantly at the terminal when you're enrolling, which is very unique, and then every time you come back, as long as you use that same card, the counterperson doesn't have to ask what your phone number. Are you in the program? The terminal recognizes you every single time, gives you rewards every single time and if you ever use a different card, it'll just say, hey, it looks like we don't have this card in file. Would you like to add it to your loyalty program account, and then you can have 10 cards on the same account if you want. Everything is automated. There's no reliance on the counterperson anymore, so it's fast, simple and seamless for the consumer.
John Diether:Peter, can you tell us what the main challenges are that your loyalty software is looking to solve?
Peter Vogel:Sure, the challenge is one getting people to enroll in your program first of all, and that relies on the counterperson saying every time hey, are you in our program yet Can I tell you about it? Or every time someone pays, the terminal will just say, hey, it looks like you're not in our program, would you like to join? So it increases enrollment. It also helps. Another problem programs have is missed transactions. So imagine all the time someone goes into a store or restaurant they don't even remember their private program. I mean, these days most of us are probably in like 20, 30 loyalty programs. You may not remember. You have to tell them your phone number and that transaction gets missed. So our technology eliminates that.
Peter Vogel:And the last thing our technology does and this is like a key thing these days, especially for compliance If you text people without their permission and your business and you do that willfully, you can be fined up to $1,500 per text. So in a class action lawsuit you could be fined for millions of dollars if you have a savvy enough lawyer out there who realizes you know what a company is doing. So we a huge part of what we do is we make it so that a loyalty program gets people opted in at the terminal when they're joining. So we get it legally complyingly opted in and then from that point forward the brand has permission to text that person special offers, birthday offers, you know, maybe an item, specific special, anything they want to. And so they've essentially created a whole new communication mechanism which before this all those people were anonymous to them. They couldn't communicate with them, but now they essentially own that customer base so they can reach out to them anytime they want to.
John Diether:Peter, something we always like to understand from our members is your definition of customer loyalty. How do you see it from from your purview? What is customer loyalty? What does it mean to your organization?
Peter Vogel:I mean we really look at the dollars and cents behind it because we're charging, you know, a fee for companies to use our product. So we always look at ROI and we always have to show, you know, mathematically, not just the warm and cushy of people love the program, but we like to show mathematically. I mean we're looking at things like how much does, what's the average order value of a member versus, what's the average order value of a nonmember, what's the average frequency of purchases for a member versus a nonmember? And then we can go in and see if we're really producing loyalty, if we're showing those people in the program, if we're changing their behavior, then we view that as kind of a sign of loyalty that we've made an impact on their purchasing behavior. Not just quantity but frequency.
Peter Vogel:Of course we love to see people recommending the program and social media, things like that. That's just a little harder to quantify. So it's we really like to look at a very mathematical ROI calculation that takes into account how much rewards have been given out and what did that cost the company. And also, what is the company paying for the management cost of the program, for the you know a company like ours what's that cost, and then what's the lift we drive? And we can equate that essentially to increase customer loyalty and X amount of tens of thousands, hundreds of thousands of people, etc.
John Diether:Now, with the card linked programs, we've noticed that customer enrollment and onboarding can be difficult. It presents its own challenges. What kind of challenges do you see brands facing with the enrollment, the onboarding, and what are some best practices that they can do to overcome that?
Peter Vogel:Well, the biggest problem with most loyalty programs and this is literally what we're trying to solve with our technology is you're reliant on usually it's a counterperson having to ask are you in the program? The best practices are always to train all your employees as extensively as possible so they understand what the loyalty program is and they're comfortable talking about it. That's one of the things we've heard in talking to counter people is they're often not even that clear on all the benefits of the program or don't feel comfortable answering questions, so they don't really want to bring it up. They also sometimes feel like they're being too salesy and they're just trying to serve the customer. It's a lot of education for staff, but the solution that we obviously recommend is by using our technology. They can eliminate that problem, because now the terminal is going to ask every single time would you like to join the loyalty program? Counter person can just be there to answer questions. Someone will say oh, what's your loyalty program? Like? The counterperson doesn't have to initiate it. They don't have to create a sale to get someone to join. They can just answer questions, which for a lot of people is more comfortable than trying to sell something to someone else. I think I'll leave it at that.
Peter Vogel:The other biggest challenge is the actual payment terminal technology. That's something that we've been about 10 years ahead of this whole time, but we're very excited for next year because all of the big companies are upgrading out of these Android terminals, and that's where our technology works perfectly. It's already embedded with a lot of these huge payment terminals. It's a really exciting year for us that we can actually finally start selling to people who can use the technology. We've been trying to sell this to people who didn't have the right terminals yet, but we're finally to that place. Whereas it's happening this year, next year, 2025.
John Diether:Thank you. Switching over to compliance now. We just published a study here at Loyalty 360 that said that 70% of brands feel that they're more focused on data and compliance and privacy over the past year and a half than they've been before. What do you think specifically in the realm of the privacy that brands are facing right now? What kind of challenges.
Peter Vogel:To bring that back to the part of compliance that we're involved in, one of the biggest challenges brands have and we've heard this from a lot of them a lot of the brands don't the only way they can opt in people to get messages from them usually is on their website. You have to drive someone from a location a restaurant, a store, et cetera to go home and remember and then go onto the website and that's a big hurdle. You're going to lose whatever 90%, 95% of people. What that means is a lot of companies never get a sizable audience of people that they can text and they can never take advantage of that medium.
Peter Vogel:Texting has become a huge thing now with I think the latest stat was 80% of people open every text they get, whereas something like 15% to 20% of people open emails. You can literally get four to five times as much exposure if you can build that text audience, that mobile audience. But you have to figure out a way to get them opted in. We think doing it right at the terminal when they're joining is the smartest, most efficient way to do it, because you're most excited about the program right when you join. It has all upside. You're joining because you see the ability to start getting free stuff, you're going to take advantage of whatever you can at that moment. We think that's the way to make sure you're compliant and you get a large enough audience to text. Because what's happening now? Most people just don't have an audience to text because they can't get them opted in. They're afraid to text them, which is smart because it can be pretty hefty, fine. But that's one of the biggest issues we see these loyalty programs facing.
John Diether:Now, you had mentioned earlier ROI when it comes to loyalty programs. How do they calculate ROI? What are some ways that you suggest some metrics, some KPIs that can be measured to evaluate the program?
Peter Vogel:So most depending on how the loyalty program is set up. We're lucky with some of our big partners. We have the ability to all the transactions flow through, whether they're members or not members, through our platform essentially. So we see at thousands and you know 6,000 plus locations right now. We see all of the spending that happens from nonmembers and all the spending from members. So it's very easy for us to see what's the average order size. So if the average member is spending, you know, $85 and the average nonmember spending $50, then we can see that you're looking at $35 out of $50. That's about a 60% lift. So you're getting a 60% lift on every purchase from a member and you can essentially calculate that out to see what that lift equates to. And let's just do some simple math and say, say the lift equates to a million dollars, and then you can look and see during that same time.
Peter Vogel:And when I say lift, it's the actual difference between what is spent by members and nonmembers. So it's not just the member spend, it's the incremental spend. So you look at that, say there's a million dollars incremental spend. Then you can look at maybe the company has spent $75,000 on rewards and then maybe they're paying a company, you know, $25,000 during that time period for management, so it's $100,000. So we would look at that and say we've essentially created a 10X ROI. If they're getting 10X what it costs them to run the program, and both the management and the rewards are giving out. So that's something that we feel confident in that they can take to their finance team and their C level and show them hey, this isn't just like a feel good, everyone has a loyalty program, so we have to do it. It actually does something right. We can actually show you financially the lift and how much it costs us to build that lift and therefore calculate the ROI.
John Diether:Thank you. You know another thing that we've noticed with loyalty programs, especially for restaurants and retailers, that many of the programs are starting to look similar, or at least consumers perceive them as working the same way. How do you recommend that a let's say, your retailer restaurant to make your program stand out? How can you make it unique, Again a backdrop of thousands of other programs?
Peter Vogel:You know, I know this is kind of a key word that people throw around a lot, but I think it really does matter. Personalization Everyone has loyalty programs where you spend X, you get Y, you save up certain points and you get something. If you have a type of product where you can give someone an upgrade or a service that's very compelling to them like airplanes or hotels, travel programs are best at this just because you have the longest experience with someone, so like an upgrade like that really matters. That's not as easy for Chick-fil-A to get an upgrade. You can give someone more points back. You can give them maybe first access or to special items in the menu, but it's not quite the same.
Peter Vogel:But you can do personalization where if you and most it depends on the program we do see skew level data through our program so we can make very specific suggestions that someone gets a free something if they buy something because we know they bought that the last three times and give people benefits tied to things they already have shown interested in and you know they like and that's going to make them more excited and want to take advantage of it than just a generic offer. I mean if you're giving them something that you know they already like and you can track that through the loyalty program. So some levels of personalization. And there's companies that do it, like AMEX, do it in a much bigger way where they give people like gourmet cooking classes if they know they're interested in that, or you can opt in to get information about seeing famous singers backstage or things like that. It's hard for a lot of sale like a QSR brand to do something like that, but you can still do a lot of personalization and I think that can set someone apart.
John Diether:Now, in terms of the technology which I know you're very familiar with, what do you predict is going to be the next big thing with technology, the next opportunity for brands? Where we headed and what excites?
Peter Vogel:you about that? Well, what I said earlier is one of the reasons I joined this company six months ago is, after doing some research, I realized that the payments industry is kind of at an inflection point where a lot of people have these older payment terminals and all they're good for is putting your card through. That's all they do. All the new terminals just like you have Android on your phone, you have an operating system like that. All the new terminals are smart terminals, which means they have access to lots and lots of different features and apps that are just kind of like available to those terminals.
Peter Vogel:So those terminals, they've moved so far beyond just being a place to pay. Now they can manage gift cards for you straight through the terminal. You can institute loyalty programs, you could accept cryptocurrency if you wanted to, you could set up a buy now, pay later program and have some way to determine someone's credit worthiness, and all that can just happen right at the terminal. You don't need any extra technology, and I always say we're at this inflection point that 2024 and 25 are going to be the years that all of these big, big chains like the McDonald's, the Walgreens, et cetera, are going to be upgrading to these new smart terminals and that's going to allow them to embrace technologies like ours, other technologies there's lots of things popping up that can make someone's payment process easier.
John Diether:Well going forward, let's say in 2024,. Is there anything that vPromos is specifically concentrating on? What do you think is going to be the main focus in the loyalty arena for your company in the year ahead?
Peter Vogel:We're making a really big push to get out there, targeting a lot more QSR and retail. So we're going to a lot of the big events. I'll be at the Loyalty3 60 event in a couple of weeks. Next year we're going to the QSR Evolution, there's another one called CRMC which does a big retail conference, and there's a handful of others. But we're going to be going out there. We've never really done much thought leadership. We had never really gone to many conferences. We've never gotten our name out there. So 2024 is the year where we want to make vPromos a known brand in the industry and educate the whole industry about what we do, what our technology is, and then, as the industry is maturing and adopting all these Android terminals, we want to be at the forefront of people's minds. So 2024 for us is all about exposure, building our brand and thought leadership.
John Diether:Excellent. Now we've reached the rapid fire question. Think of it as the lightning round of our interview. Most people think it's one of the more popular features. I'm just going to give you some rapid fire questions to answer with. The first thing that comes to mind Are there wrong answers? No, at least I want you to know yeah, it's not a personality test. What is your favorite word? Peter: Opportunity. John: What about your least favorite word?
Peter Vogel:Can't as in like we can't do that.
John Diether:Got it. What excites you?
Peter Vogel:Well, I just went through the whole explanation of next year. For us, we're very excited about 2024. We think this. You know, vPromos has been around since 2009 and our technology has literally been 10 years ahead of its time this whole time. So we're finally like we feel like we can compete in the marketplace and have a product everyone can use now.
John Diether:And what do you on the flip side? What do you find tiresome?
Peter Vogel:Negativity or the lack of solution, finding people who critique everything versus coming up with solutions to solve those problems.
John Diether:And what famous person, living or dead, would you like to invite to dinner?
Peter Vogel:Well, I'm a long time reader and writer, so I think I'm going to have to say Ernest Hemingway, just based on his wild, crazy life.
John Diether:What profession other than your own would you like to attempt?
Peter Vogel:You know I've always been fascinated by standup comedy. There's probably a reason I'm not a standup comic, but it doesn't mean I wouldn't want to be that, and I've actually even. There's some things you can do locally in everyone's area where you can join clubs and kind of learn standup comedy, and I've always been intrigued to do that because I feel like it's such a hard thing to do that it's like it's intriguing to me that it's so hard to get up there and make people laugh.
John Diether:Okay, so what profession would you avoid?
Peter Vogel:Finally. So this is the exact opposite. I think, yeah, it's not this sounds mean, but probably dentist. Just because I don't like going to the dentist very much and I couldn't imagine having to drill out people's mouths all the time. That seems kind of horrifying to me.
John Diether:And who inspired you to become the person you are today.
Peter Vogel:Well, it's probably cliche, but probably my mom was always. She was a university professor, then ended up going back to law school when I went to college and got her law degree and kind of started a whole second career and has just always been a very educated, well-read person and I got my love of books and my mom always had a huge library, so I was lucky enough to be able to have access to lots and lots of books and always see other people around me reading, which I think reading is still a big hobby for me, so I think that's that's an important was an important part of my kind of intellectual development.
John Diether:And what do you typically think about at the end of the day?
Peter Vogel:You know I'd love to say I think about everything I'm grateful for every night, but that's I think that's something that I want to do. I think more realistically, like most other people. All the meetings and calls I know are happening in the next, you know, next day kind of run through my head and you know it's hard not to think of that as you're kind of planning for the day falling asleep.
John Diether:And how do you want to be remembered by your friends and family?
Peter Vogel:Let's see. I'd probably want to be remembered as a kind of a kind, thoughtful person that was very generous.
John Diether:Well, thank you for being a good sport on all those, peter, and thank you for taking the time to speak with us today. It was great hearing your perspective on customer loyalty and we look forward to staying in touch, learning more about what VPromos is doing over the next year.
Peter Vogel:Awesome. Well, thank you very much for having me and I'm psyched to see you all on your team in Denver, here at the Loyalty 360 conference coming up.
John Diether:Yes, certainly. See you then, and we'll be back soon with another edition of Loyalty Live for Loyalty 360. I'm John Diether. Thank you for watching. Thank you for watching.