The MOL Group is a leading oil and gas company operating across Central and Eastern Europe, headquartered in Hungary, with operations in over 30 countries and over 25,000 employees.
István Mag, is Head of their Digital Lab, and he joins this episode to share how the MOL Group is transforming itself from a traditional fuel retailer to a digitally-driven consumer goods retailer.
The business has incredible plans to expand to new categories, led by loyalty as the platform on which their expansion plans can be realized!
Listen to hear this incredibly impressive story of loyalty in central Europe with the MOL Group.
1.) István Mag
2.) MOL Group
Welcome to Let’s Talk Loyalty, an industry podcast for loyalty marketing professionals. I’m your host, Paula Thomas. And if you work in loyalty marketing, join me every week to learn the latest ideas from loyalty specialists around the world.
Hello and welcome to episode 278 of Let’s Talk Loyalty. Today, I’m delighted to be back in the fuel and convenience retail industry, where I’ve spent so much time in my career over the last 10 years in my experience, this is one of the most exciting sectors for loyalty marketing programs and professionals.
My guest today is Istvan Mag, who is the head of the Digital Lab for the MOL Group, a leading oil and gas company across Central and Eastern Europe. Headquartered in Hungary, the MOL Group has operations in over 30 countries and employs over 25,000 people worldwide. As you’ll hear the MOL Group is truly transforming itself from a traditional fuel retailer to a digitally driven consumer goods retailer with incredible plans and ambition to expand in new categories led by loyalty as the platform on which their expansion plans can be realized. Istvan shares their innovative program design and the key success factors.
So I hope you enjoy this incredibly impressive story of loyalty in Central Europe with the MOL Group.
Paula: So Istvan. Welcome to Let’s Talk Loyalty.
Istvan: Thank you very much. It’s a pleasure to be here.
Paula: Oh, it’s a pleasure to speak with you after two years. My goodness, we, we had a wonderful conversation and I wrote an article about the MOL Group as we talked about. Uh, but since then it seems you have been working harder than ever.
Istvan: Yes, indeed. I think the whole company, um, especially in today’s environment. Sure. Um, I think everybody’s busy in the oil and gas industry. Yeah. Um, and we, at MOL Group, we are also quite busy, um, for sure with, with everything that’s going on.
Paula: Great. Well, we’ll be super excited to dig into all of that today. So before we start talking about mall group and all of the digital transformation that you’re leading, um, as you know, we always start with our favorite question to understand loyalty professionals and what they admire in the global loyalty industry. So I know you have a very strong one that you, you love very dearly. So please do share with our audiences to van. What is your favorite loyalty program.
Istvan: Here, I have got to stay Starbucks. And the reason for that is that, um, for our own transformation and loyalty transformation and, and business transformation, Starbucks has been one of the north stars. Mm. And I just admire how they use the loyalty program as a way to communicate with customers to, to drive their own business strategy. Yeah. And how transparent they are about it and how seriously they take it. Yeah. Uh, just, just one, one data point from their last, um, earning school. Mm-hmm 53% of their U.S. operated store revenue is driven by Starbucks Rewards Members. Yeah. That’s a staggering figure. Yeah. Uh, that, that is. Extremely difficult, um, from my experience. Yeah. Um, in, in such an industry and in such a market. Yeah. And, um, I would love to get there as well with, with MOL Group. Yeah. Both in terms of, in terms of the, the figure and how transparent we can be about our results.
Paula: Yes. Yes. Well, you know, I mean, there’s a couple of reasons. I, I fully agree with you. Of course, first and foremost, Istvan, you’re not the first person to mention Starbucks. Um, and particularly the us proposition, because actually it is different in different markets. Um, of course, I guess it is localized, but, the piece that always impresses me and you’ve already, um, alluded to it, I guess it is being discussed, mentioned respected and really leveraged at the most senior level possible, and not just in a way where they’re saying, well, Oh, you know, by the way, 53% of our, our revenue comes from loyalty members. They actually, as you said, they attribute it. They actually say it’s driven by the loyalty of our membership. So to me, that’s the most extraordinary piece is they actually credit the program with driving the business performance.
Istvan: Exactly. And what, this is also telling us, and this is widely discussed in your podcast as well. Yeah. Is that they understands the impact, of the loyalty program. Yeah. Which is always a challenge. Uh, we always discuss this internally and, and also globally. It’s a, it’s a big discussion. Yeah. I’m sure they are quite ahead, in understanding what Starbucks Awards bring to the firm mm-hmm and that is why they talk about it so much. And that, that is why they invest in it so much.
Paula: Yeah. And the investors clearly have the confidence and the understanding, and I think you and I, Istvan have definitely been on the, um, the side of having to ex, explain or justify, I suppose, the level of investment required in order to do loyalty well, I mean, we’ll probably never know what Starbucks is spending in order to deliver that proposition. I wish we did, but anyway, mm-hmm so listen, um, you are in a super exciting industry. And in the two years since we last spoke, um, I’m actually just so impressed with the incredible number of ideas and enhancements, whether it’s rebrands or new, new businesses that are coming out. So, first of all, I think because we have our global audience, Istvan, will you just, first of all, explain the company MOL Group and the incredible work and footprint that you guys have in terms of your business.
Istvan: Yes, we, in MOL Group, we are a Central Eastern European, primarily Central, Eastern European integrated oil and gas company. Mm-hmm that means that, uh, we do everything from upstream through to downstream, petrochemicals, logistics and, and, uh, consumer services or, or B2C. Yeah. Um, we have operations in 30 countries, uh, overall, globally mm-hmm and, uh, we have approximately 25,000 employees. Wow. Um, related to what I’m doing, um, We are working or my team and, and, uh, the people I work with, we are in the consumer services business. That’s the B2C side of the company. Yeah. Which is primarily and originally built on fuel retailing. Mm-hmm so service stations mm-hmm um, but that business is being extended, uh, continuously towards, you know, convenience type services and mobility services, like cash sharing, fleet management, uh, electric charging, et cetera, etc.
Paula: For sure. And I think I heard a number about 2000 fuel stations. If I’m not mistaken, is that about right?
Istvan: That’s correct. Um, the consumer services business is centered really in, in this, in the Central European Region. We are presenting nine countries. Mm-hmm in approximately 2000 service stations.
Paula: My goodness. Wow. I think what most excites me Istvan about your role and the work that you’re doing is, it is a strategic transformation of a business, you’ve already alluded to, you know, way beyond fuel, there’s so many categories that you’re expanding into, but it really seems that loyalty is seen as the linchpin that’s, um, you know, everybody is looking to, to deliver on this exceptional business transformation. So I’d love you to explain maybe how did loyalty become, you know, the star in this story?
Istvan: That’s a great question. And, and I think the answer to that is that, we have started with really strong vision and the long term strategy, which is all encompassing in a sense that we knew that we want to move from an analog fuel retailer to a complex consumer services company. Mm-hmm simple reason for that is obviously the, the potential and, and longer term decline of fuel retailing. Yeah. Plus the extraordinary, potentially in the current reach of the business, right? Uh, our business is big, a huge amount of people use cars. If you use car, you need to stop at a fuel station. Sure. So our, our reach into the population of Central Eastern Europe is massive. And knowing this and knowing what’s gonna come in the long term, the question only is, is when it’s gonna come, but not if it’s going to come. Yeah. The vision came that we need to diversify ourselves. Yeah. And one of the, one of the key things, obviously the key thing of, of diversification is, going what we call from fuel to non-fuel in, in our retail business. Mm-hmm so actually introducing convenience, uh, grocery gas type of products. We have several key, um, hero products already, so to say like, uh, coffee, hot dog, sandwiches and likes. Um, but we also knew that we had to go beyond that and. Try to drive the whole transformation around mobility mm-hmm . And that is, you know, that is obviously represented by electric charging as a way of, you know, as an alternative fuel. Yeah. But also other types of transformation, like car sharing, public transport, like, you know, the meaning share of public transport, et cetera, et cetera. Yeah. And then you add this all up. This is a huge amount of different products and services that we want to offer to our consumers. And, one way to create a platform for these services is obviously to leverage digital and loyalty. Loyalty is for us is not, not just a program it’s in the long run. It’s a, it’s a platform where all these services should come together. Yeah. Uh, that is supported by a standard complex technology platform. So that’s how, that’s how it came together. It’s not, um, we are not doing loyalty for the sake of loyalty. We are. Yeah. Doing loyalty because we have a long term. Transformation vision that is quite well supported by loyalty, especially the, the type of loyalty that is today, I think considered modern and a requirement. Yeah. That, that it’s, it’s fun. It’s engaging. It’s it’s, uh, highly tech driven. Yeah. Um, and very much actually as well, data driven.
Paula: Absolutely. And it sounds like, you know, despite its complexity, because clearly that’s an extraordinary level of vision and ambition, but what I’m hearing coming through, if I’m right, is almost simplifying it back to the opportunity to own the customer because they are, you know, predominantly, already customers of yours, so I think you’re identifying that once you understand them, once you have relationships with them, I guess the trust factor, then there’s an opportunity to move into lots of other businesses as well, which is quite incredible.
Istvan: That’s, that’s exactly the case. So when you look at the traditional fuel retailer, there’s a massive footfall. That is, that is coming anyway. but, uh, a lot of the companies, and this was including us as well, still to, to some extent, including us a large portion of, of this trans transactions and footfall, you don’t really know too much about, you know, who is behind it. Yeah. Why that person has come to you, why that person has chosen you, how you can, how you can keep that customer on board and how you can keep that customer loyal to your brand. Yeah. And one step further from that was these traditional loyalty programs where you had a physical card, which you, which you swipe every time and after a while you get enough points to buy something for free. Yeah. Right. But that’s. Um, in our case, in, in many, many of the cases, we did not have a proper contact to these customers. Mm. We did not really know too much about them. We knew that they were swiping the cards, but we didn’t know, um, much more. Mm. And then this is a huge step forward from this that, we actually know a lot about these customers because yeah, even though the registration is very simple, we try to build up the, the, the knowledge, uh, of them, uh, step by step and we have a completely different level of relationship via the mobile app. Yeah. Which, which we try to put in a center, obviously beyond the service station. Yeah. The center of the relationship. And we try to get the customer. Use this app, engage with it, engage with the offers, uh, get to know the offers better. Um, and, that kind of knowledge is such an extra compared to a legacy program that yeah. That knowledge of that capability is driving additional footfall and additional basket, um, in our relationships with, with, with our customers. Yeah. And that, you know, like earning the right mm-hmm to, to do this mm-hmm um, will hopefully give us the right to do even more. Um, in, in the future. So that’s the workload.
Paula: I have no doubt.
Yeah, no, I have no doubt. And just on the piece about the app Istvan. Um, something that I do think a lot of brands and a lot of people listening to this show probably struggle with is convincing. You know people to, to download one more app, because I think it’s like, again, loyalty cards in years gone by the first two or three that you signed up for is very exciting. Then the wallet gets stuffed and you stop signing up for the plastic card. And I think that’s also happening if I’m honest and digital. So how are you finding, you know, was it easy or difficult to convince your customers that they should download this, this app with you?
Istvan: I think the keys that, uh, In this aspect, we are in the lucky industry. Mm-hmm because fuel retailers, you know, is, is, is one of the, if you, if you use a car yeah. Then your fuel retailers is quite an important part of your life. Similarly to a grocery retailer, if we give a valuable enough proposition to, to the customers to download the app. Yep. Then that can drive. A huge take up. And that’s what we experienced. We managed to get, I think, the, what we call Welcome Rewards. Right. Okay. And that has driven a lot of registrations very early on. Mm. Now what is, what is more difficult to do? And in some cases, in some markets, that’s where we are that we have reached in some cases, quite high numbers of registrations. The question. When it starts to plateau then yeah. How you can start to grow exponentially again. Yeah. Um, that is, that requires a little bit of different thinking again, because your Welcome Rewards and your structure is working well, you have onboarded a lot of people, but how you can get that second phase of growth in. Yeah. Yeah. And in many cases, that’s where we are.
Paula: Okay, well, I’ll definitely ask you about that in a second, but Welcome Rewards, I guess, quite simply it’s instant gratification and yes, I know there’s one at every tier, and what I do remember is Tovan from when we spoke two years ago, was that you have an earned strategy in terms of points, but not a burn strategy. So I’d love you to explain that for people listening, because it is quite a controversial idea. And I remember wondering if you would have any, you know, resistance maybe from customers that they don’t actually burn the points at any point. So will you just explain how that works and particularly any feedback you’ve had with it?
Istvan: Yes. Um, it’s interesting. We have, uh, done a huge amount of research. Mm-hmm , uh, both globally mm-hmm um, in terms of, you know, benchmarks and competitors. Yeah. Similar players, similar industries, et cetera, et cetera. And obviously we asked our customers. Yeah. And the reason why we have concluded with this setup is that the very much like the tier system because it allows us to rewards, more loyal customers to a higher extent than a simple earn burn program. So we can disproportionately reward lo the more loyal customers and that’s, that was very appealing. Yeah. And that, what, what we have found is, is the extra motivation to get to a higher tier. Okay. And then to stay in that tier is a really important factor in keeping the customer engaged with the program. Okay. Now what airlines are doing mostly, at least from my knowledge is that they have, they, they have the tier structure and they have two types of points, status points, and award, and I think is award points, rewards. Exactly. So there are status points, which you accumulate in order to get from one tier to another, but there are points that you can spent. Yeah. Now we have thought about that structure as well, but we have found that complicated. Yes. For the, for the, for the reach that we are trying to get, we are, we are, you know, we are the major brand in many of the markets where we are, and we are trying to get an extreme level of coverage yeah. In the population. And we thought that that would be actually too complicated. So, so for us, obviously for airlines, it might be working mm-hmm , uh, for us that put them too complicated. So we decided that we keep the points because people like to collect points. Yeah. Uh, but we actually use the points to buy tiers, right. And the only, the only reason for, for, for the points is to get from one tier to, to another. Okay. And we were quite. Afraid of this, actually, this, this, this change me too, but also people like to spend the points, but so far the feedback is really positive. I can say with all honesty that this is actually more. We had less issues from this than what I expected originally.
Paula: Wow. So clearly the status points, if we call them that you are using them and everybody really understands that. And I know you have four tiers, one, which is, you know, not visible to customers. So almost like a secret kind of V I P but yes. So, what do, um, the actual members get then if they don’t get to, you know, redeem and, and burn their points, what is the value proposition then for joining the program at each of the tiers?
Istvan: Yes, we, what we start with, as I said, the, the Welcome Reward, what, what we start with is, um, is, um, Free drink of your choice. . So even when you, even When you, when you enter, we, we are not gonna tell you that this is your reward. You can actually select, uh, what you would like to get. Okay. And most people there are getting a coffee or an energy drink. Nice. Um, and that you can, you can actually select with yourself. Wow. And one of the golden sentences that, that, um, our colleagues at the service station, uh, service stations are using can invite you for a coffee. Nice. And, and if the answer is yes, then obviously the, the next answer is here, we have a great program. It’s called MOL Move, please download it. And then we can give you, um, a free coffee immediately. Okay. Yeah. So this is, you can actually do it. You can actually do it immediately on, on site . Um, that’s one. The other one is, is a fuel discount, which is, uh, which is in two steps. Um, even on your first fueling, you can, you can get a discount and then if you have used a discount, then you can get another one on your next fueling. Nice. Okay. And, and then in the following tiers, what we started to introduce is what we call a Flat Tier Discount. So if you’re a member of a certain tier, you are eligible, to a certain level of discount on all of your transactions. So that’s not a, that’s not a coupon that’s if you are identifying yourself as a loyal customer of, of MOL Group. Yeah. Then, uh, you are just entitled to that, uh, to that discount, let it be fuel, let it be, um, a hot dog or a sandwich or a coffee. Okay. Um, you can, you can get that discount. Um, and that is increasing, uh, nice obviously from, from one tier to another. Yeah. And, uh, what I think is really important and we have gotten a lot of, uh, positive feedback on this is if you’re a member of a, of, of our loyalty program, then you can use our toilets for free. Obviously many of our toilets are for free, but, uh, in some cases when we invest a lot in maintaining the toilets and really to like to a really high quality, yeah. Then we actually ask money for that, but from our loyal customers, we don’t. Wow. And, um, and that, that is, that is actually quite a positive, um, um, valuable reward. Uh, yeah. So to say, based on the feedback and the, and the survey research that we have done.
Paula: Wow. Yeah. Yes. And, and I think in years gone by it’s something that fuel stations probably didn’t invest in and didn’t perhaps realize that that drove the whole experience into a very negative place. So thank goodness. It feels like the whole industry has stepped up and taking care of us as human beings, you know, kind of getting the basics. Right, so.
Istvan: Yes, it’s, it’s, it’s so obvious. Yeah. Um, but it’s so difficult at the same time and it’s yeah. and it’s much more sensitive. It’s much more of a sensitive topic than, than, than you would think? Probably. Yeah, at least I then I would’ve thought. Yeah, even though I’m I, I use the toilets. Yeah. It’s um, it’s just, uh, it’s an emotional, it’s an emotional thing.
Paula: It’s very basic. Yes. Yeah. I remember being pretty outraged a couple of times, years ago, but you know, I nearly wanted to name and shame, you know, I wanted to go and post these pictures and wow. Embarrass these retailers. No, genuinely, it just wasn’t uh, wasn’t even safe. I don’t think so, anyway, off topic. Back to your program. Istvan um, gamification I know is extremely important. Um, it sounds like you are really focusing very heavily, so whatever about, yes, it’s an earned proposition purely for tiers. It sounds like the core of driving the engagement with the program is focused on the fun aspect. So will you tell us a bit about your gamification ideas and, and what you’re finding to be success?
Istvan: Yes, this is also coming from, from very early on. Um, and it’s one of the key. I think agendas of our EVP. Okay. When it comes to the whole loyalty, loyalty experience, he has been driving this, uh, I think from the, from the beginning and we have introduced a lot of different types. Yeah. Um, one which, which is what probably everybody, everybody knows is this. Uh, ch what we call challenges, but it’s actually like a digital stamps collection. Mm-hmm, probably everybody has done that before that you, like, you go your favorite, uh, coffee chain, you get a, like a paper, um, yeah, like stamp collector, you get your stamps and after 10 stamps or whatever, you get a free coffee. Yep. And they do it as well, obviously digitally, um, and in a number of different ways with a number of different products. Um, that’s one. The other one is, um, The huge number of different, uh, promo mechanisms that, that we have implemented. Mm-hmm one that is working really well, I think is quite an exciting concept is the multi-use coupon mm-hmm so that it’s the discount or the offer that you get is not unlimited, but you can use it several times and we can set how many times you can actually use it. Okay. And that is, that is a really exciting concept because, people who start to use it, you can actually start to change behavior with it. Wow. And that is, and that, that is that, that is one that, um, that, that we are, you know, following really closely. Yeah. And then, um, Obviously have we have all of the, the usual, the usual stuff, like a happy hour coupon or like a location specific coupon and, and, and stuff like this. Mm-hmm , but what is the most exciting of all? And so far have generated a really high engagement, uh, rate is the Scratch Card, um, which is again, if you. If you like lottery or, or if you like to play, then you probably know what a scratch card is. Yeah. Uh, we have implemented that in, in the phone itself, so it’s actually a digital scratch card. And obviously it’s not, it’s not like a lottery, we have a business. Logic behind. Yes. So we want to drive what the customers can win, but the feeling of winning is definitely there. Yeah. And that is, that has a really positive impact on the engagement rates that we are seeing.
Paula: And also I think the feeling of scratching, because I know your digital version is rubbing the phone screen.
Istvan: Yes. Wow. Yes. It, it really, it really feels like a, like a scratch card experience just on the phone.
Paula: Yeah. And I think people intuitively, you know, it’s, it’s, it, it gets over all of the, I suppose, the problems about educating people again about points and what they’re worth and all of that, like put a scratch card in front and give them, you know, a simple instruction and you’ll never have to teach them about it again. It’s, it’s, it’s really clever idea.
Istvan: Yes. And, and, and, uh, people just love it. And I think one, like one additional point is that, uh, what we are experimenting with a lot is, is how we can combine these. Okay. Uh, obviously with the, with, with the rewards that we are giving in the tier and yeah. And the gamification elements together, plus actually we have implemented a, um, a prize winning game, uh, feature in, in our application as well, which is, is, is a real lottery. And that is a longer term game. So, you know, in our industries, it’s quite, um, uh, I think, um, a popular, uh, way of marketing that you can win a car as a customer. Right. Of course, wow. Um, and, um, we play this game or this, this, this campaign quite, uh, quite a lot and it’s very, very popular. Yeah. And we have implemented that, that game fully in, in the loyalty experience. Okay. And, um, and obviously as a loyalty member, Even we had, uh, campaigns where only loyalty members could win the car. Yeah. But, uh, but even, even when not only loyalty members can win loyalty members, they have a much more convenient experience and, uh, they have a much better chance to win, ultimately.
Paula: Yes, it sounds quite complex Istvan, and I know, you know, you have an incredible team um, an incredible amount of customer journey. So can you give us a sense operationally, what is required in terms of delivering a program of this scale and maybe a sense of your membership numbers as well? Because I know you’re live with the Move program in three countries currently, is that right?
Istvan: Yes. Yeah. Yes. That that’s correct. Okay. That’s correct. Um, first of all, about our numbers, um, what I can communicate and what we started to actually also include in our investor materials. Yeah. Is the mobile app downloads figures. Yeah. Okay. That is actually representing our transformation from the legacy program to the, to the app based program. Yeah. And we started with 50,000 downloads in 2019. We are now at 1.3 million. Great. Uh, we increased by four times, then three times, then two times. And we still, we still on a, on a, on a quite significant growth curve. Okay. We want to get to more than 3 million, uh, by 2025, mm-hmm , which would mean that we would have more mobile app users, then originally legacy loyalty customers, um, at the starting point. So that is like a complete transformation. And we are, when we look at the numbers, we are approximately halfway where yeah. Wow. That is the, that is about the, the, the numbers or, or, or where we are. Mm-hmm .And in terms of what it takes, um, from a technology perspective, we knew that from the beginning, but it’s quite a complex, uh, exercise because obviously for this, we have not just implemented a loyalty system. Yeah. Uh, standalone loyalty system, we have implemented a new technology platform. Mm-hmm that includes a loyal, obviously a loyalty system, but also CRM and marketing automation. Um, and, uh, several other components. Yeah. Also including an API led integration platform, that is actually supporting an omnichannel experience, meaning that obviously our app is, is, is the first, um, or is the, the center of it? Mm-hmm but you also have a website. Yeah. Yeah. We are also obviously communicating via email. Yeah. And, um, and sometimes even Viber and all of these need to be, harmonize together. So you need to obviously need to see everything. Yeah. Uh, if you get a, if you get an offer in your email, you need to see it on, in your phone. If you accept, if you choose your, your, your welcome drink in, in your email, mm-hmm , then that chosen welcome drink should appear in your phone. So this goes without saying, but it it’s very difficult to, to, to get it done, uh, in, in reality. Yeah. And we would need quite a lot. Um, technology components to, to deliver it
Paula: For sure. And a lot of clever people. So what kind of team have you got Istvan supporting you?
Istvan: We have, um, we have a, a team that is called Digital Factory. Okay. Uh, the Digital Factory is, actually or could be broken down to, to three areas. One is data analytics. , that team is building the data platform and, and, uh, the analytical capabilities that can, you know, consume and, uh, and use the, the vast amount of data that we have. Yeah. Of the business, not just from loyalty, but the overall business. Okay. The second one is, is the loyalty team. The loyalty team consists of people, um, with a product owner background, you know, and people with, uh, commercial background , people with, uh, even, um, user experience, nice. And even developer background. So it’s quite, um, quite a, a complete team. Mm-hmm . Plus we have. We have an IT team in the Digital Factory that obviously is working very, very closely together in, mostly in agile way with the other two. Yeah. Um, teams. Yeah. And there we have there, we have all the roles that, that you would need. So architects, um, developers, DevOps, engineers, and, um, integration, integration guys and, and, and all of it. So we have, we have, we try to deliver the solution end to end, but we are. We are growing, but still, um, for this effort, uh, a small team. So obviously we work with partners. We work with a system integrator. We work, uh, and we work with other, um, smaller partners as well. Mm-hmm to get the solution done. And obviously from a more group perspective, this is much more than us Digital Factory. Yeah. This is actually, we are doing this primarily for the retail organization. So, essentially the whole retail organization is, is involved and extremely engaged and, you know, making a lot of decisions yeah. From marketing through to commercial and, uh, sales. And, uh, there’s a super high engagement. I, I used to say that that, uh, loyalty is a team sport. Yeah. It’s really, if any of these, if any of these, these teams or members are not engaged or are not. Yeah. Um, Not supporting the whole program itself or something goes wrong in any of the directions. Then, then the whole, the whole program is suffering. Totally. Plus, and this is just really, but obviously I, I can mention all the support functions as well, like a communications team or an IT team. Yeah. They’re also very much involved. Yeah. So that’s why it’s so difficult. I think that it’s a strategic transformation, it’s an organizational transformation and it’s a technology transformation as well. Yeah. And that is really difficult to, to, to get it done. And the extra complexity is actually coming from the fact that, um, we are a multinational company. Yeah. So we somehow need to manage the centralization and the decentralization aspect of it as well. Yeah. We need to, when you build a technology, that technology needs to be, as standard as possible when retail is a local business. So you need to give the local team enough , wiggle room. Yeah. Right. To, um, to do what they see best for their own market. Yeah. And that, that balance is, is actually quite difficult to, to get it right. And we work really hard to. To get it right?
Paula: Yeah. I like your analog Istvan. Um, first of all, I, I love the idea that it’s a team sport. I think that’s a really nice concept for everyone to feel like they’re part of something and actually something fun as well, because that’s actually how it sounds, what you’re building, that, that you’re extremely proud of it. And that there are so many people, that you’re consulting and including, and are involved in, in driving the performance. And then you also use the term, like it’s like a race car. Um, so I’d love you just to explain that analogy as well, because. I do think this whole idea of, you know, centralization, as you’ve said and decentralization, it’s sometimes a case where frontline staff are maybe, you know, remembered at the beginning. For example, there’s a, there’s a rollout and a big launch, maybe a TV campaign. And then in very many cases I’ve seen, unfortunately, you know, that the project isn’t continued with the same level of particularly frontline support. So I’d love you just to talk about how you manage that in the MOL Group.
Istvan: Yes. I think this is one of the most important questions, at least from my experience, you know, when, when we try to get a loyalty program introduction. Right? Yeah. And, um, how, how I look at it is, that, our team, the Digital Factory, we are actually bringing the capability, which we can consider as a race car. Yeah. Um, hopefully it will really be like, feel like race car , uh, that we are, that we are bringing. Um, and that race car has to be driven if we want to do it, right. It has to be driven by the business. Yeah. And, really in, in our industry massively by the local business. Mm-hmm so people who are close to the customers, people who own the customer relationships from a day to day yeah. Uh, basis mm-hmm and own the service stations. But that, but, but this kind of transition that, okay, I’ve built the race car now I’m giving it to you and you can just drive it and , I’ve done my part. Sure. This doesn’t work. Like it doesn’t work in formula one or any other or any other, uh, similar competitions. Yeah. It’s always a back and forth. Yeah. So you build the car, but it needs to be continuously maintained. It needs to be continuously improved. Yeah. Otherwise you’re gonna lose the race. Yeah. And in our case, What, how we have started is that we have built the car and we started to at least partially drive it. And increasingly we are giving away this, this, this responsibility to, to the business, from our perspective, the retail, the retail team is the business. Yeah. We are giving that responsibility away. And then we are going to, you know, at some point we are going to focus on the feature development and the operations. Obviously like you would have in, um, in, in, in, um, In a race car team.
Paula: Yeah. Yeah. Wonderful. And again, I think with that kind of analogy and thinking, I think we all know that you need a professional race car driver at least to get up and running, and then you need to learn, you need to practice, you really need to pay attention to the tools you’ve been given. So I do think, as you said, it’s, um, it’s an ongoing requirement. And if you treat those frontline employees with that level of respect, giving them the exciting tools to play with, but obviously showing how powerful it is and can be when it’s optimized. I think that gets them engaged and excited as well. If, if, um, is, is that your experience?
Istvan: Yes. Beyond, beyond, uh, loyalty being a team sport and the fact that you need everybody on the team to, to get it right. I think that obviously the key role is the loyalty manager’s role. Yeah. Yeah. Uh, that is without, uh, without a question mm-hmm and that, that job, is an extremely complex job because you need to have everything from a marketing mindset, uh, to a commercial mindset, um, an understanding of the technology. Yeah. That what the technology can, can actually do for you, how you can leverage it. And that is very rare. That is a very rare skillset. Um, and one who could actually master these and, and, and do these, right. I, I think that that person is an immensely valuable, valuable person for sure. Um, that that’s one and the other one, which is, which is obviously key in, in our, in our case, definitely is the, is we call them Hosts. Okay. Or frontline, frontline employees. So the, the people on the service station who represent MOL okay. Or who are the face of more to, to our customers, who have obviously no idea of the technology called Background and they don’t need to have that kind of idea, but they need to buy into the concept just as much as the rest of the organization, because they are the ones yeah. Who need to ask the customers, whether they have the program and they need to, and if the customer says, no, they need to be able to convince them. Yeah. That, okay, please, it’s actually worth for you specifically. It’s worth joining that program. Totally. And that, um, That is not coming easily. Obviously,
Paula: I, I fully agree. I’ve said it a few times on the show Istvan, you know, if I’m asked at any point of sale to join a loyalty program, like I will always ask why, and if they aren’t genuinely interested and believe it’s valuable for me to join, I will instantly dismiss it. And I’m not gonna give anyone the satisfaction, even knowing that the poor loyalty professional in the background has a very well intentioned piece, but if the frontline person doesn’t believe in it, then all of that hard work just goes to waste. So it is the, the final moment of truth. So I love to hear that you’re putting that level of focus and, and support for them.
Istvan: That’s true. And, and, um, and it’s very hard for them as well. We had, uh, we had, when we launched the first version of, uh, of our program, we had times when the technology wasn’t just wasn’t, mature enough or just wasn’t ready. And we had some issues and even, even, even at those points, they would need, you know, they were the ones to whom the customers were complaining and obviously the post center. Yeah. And that’s a really, really difficult job to do. Sure. And where you need to and where we need to get them is that we don’t go trouble. That’s the first, you know, mm-hmm, like we don’t want, they have a complex enough job already. Sure. We don’t cause additional complexity for them. Mm-hmm and we give them. At least, we make sure that the loyalty program is actually a way for them to satisfy their customers. And, um, they really, as I, as I mentioned before, they can only, they, they can only feel like this if they do believe in the program. Sure. And that’s why, what we have, uh, what we have introduced is, is specifically, um, I’d like an employee benefit program. Okay. Which is, uh, benefit specifically designed for our hosts. Mm. So when you, when you enter, uh, the mobile app, you can, you have a, like a dedicated rewards page, uh, which are only their rewards and they can also obviously, you know, progress from one tier to another. Mm. Um, and, uh, and use the program themselves. And, yeah, that’s the, I, I wouldn’t say that we have that, that we are there. But we have made a lot of progress.
Paula: Wow. With these things I love when the employee program is a, an enhanced version, let’s say even of the customer program, I think it is a, a genius strategy because it, it just, you know, covers off so many benefits in terms of, you know, again, respecting those individual people, um, helping them learn how to use the program by being a user of the program. And it just means that at the end of the day, you know, everybody knows where to go central repository segmented out into a different way. But, um, definitely I think it’s one of the perhaps underutilized tools that, uh, loyalty professionals don’t always think about. So a wonderful piece.
Istvan: I think so, yeah, based on my experience. I think that that’s, that’s, uh, that’s truly the case and yeah, I would advise everybody from also from our experience, but also logically yeah. If, if there is a chance to, to, to get this kind of feature in, yeah. I would definitely recommend to do it.
Paula: Wonderful. My final question is a tiny operational detail Istvan, but I, you, you mentioned it already and I, I love it because I really would just wanna hear the experience so far. You mentioned Viber, um, which for people listening around the world is, I know it’s a dominant ma messaging platform in Central Europe. Um, where I live here, we, we use WhatsApp, um, as the dominant platform. I think WhatsApp is in most countries, actually the, the, the strongest one, but Viber definitely has, um, a huge installed base. But you mentioned that as one of the, the communications channels that you’re using with your members, so, can you give us any insight in terms of how popular it might be or how that’s working for you? Uh, alongside obviously email, which is, I suppose the one we typically rely on.
Istvan: Yes. Um, I would say it has rather a complimentary role. Okay. Um, we use, uh, we, we use push notification massively, which is which, which is working really well on the mobile app. Okay. Uh, and email, these are the primary ones in, and in some cases we use, uh, like text message, like SMS. Okay. And, and, and Viber but mostly in our case, uh, the push notification and email, um, Okay. Perfectly perfectly enough. When we have a specific goal that we want to achieve, where. these channels have an extra added value. Mm-hmm then, um, then, then we use them.
Paula: Okay. Okay. Well, what I’m really hoping Istvan, is that we can have our next conversation much sooner than we had our last one, because I know today we haven’t had the opportunity to get into some of the other big ideas that I know your favorite program. Starbucks is starting to talk about. Some of the web 3.0 topics, which I think we’ll save it for the next time, because I think we’re both at the stage of watching and waiting and, and hoping to see what new ideas come through. So, um, if it’s okay with you, I’d love to kind of literally say, please come back and, and have another conversation in 12 months time. So with all of that said, Istvan, is there anything else that you wanted to mention that I haven’t asked you about today?
Istvan: No, I think we have covered, all the ground that, uh, that at least I was planning. And thank you for the great questions. Wonderful. This was an honor to, to be here.
Paula: Oh my goodness. Super inspiring. So listen, Istvan Mag, Head of Digital Factory at the MOL Group. Thank you so much from Let’s Talk Loyalty.
Istvan: Thank you very much. Thank you for listening.
Paula: This show is sponsored by The Loyalty People, a global strategic consultancy with the laser focus on loyalty, CRM and customer engagement. The Loyalty People work with clients in lots of different ways, whether it’s the strategic design of your loyalty program or a full service, including loyalty project execution. And they can also advise you on choosing the right technology and service partners on their website, The Loyalty People also runs a free global community for loyalty practitioners and they also publish their own loyalty expert insights. So for more information, and to subscribe, check out theloyaltypeople.global.
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