We revisit insights from Dell’s Mitch Kennedy on how one of the world’s most iconic technology companies is “powering the next technological revolution” through loyalty and engagement innovation.
With a strong focus on clear and measurable business outcomes, Mitch shares perspectives on the effectiveness of transactional rewards, the growing role of gamification, and the importance of understanding human psychology in shaping customer behaviour. The conversation also highlights the evolution and global impact of Dell’s Advantage Rewards programme and broader loyalty initiatives.
Show Notes:
3) Book: Drive: The Surprising Truth about What Motivates Us by Daniel Pink
4) Book: Actionable Gamification by Yu-Kai Chou
PAULA: Welcome to Let’s Talk Loyalty, an industry podcast for loyalty marketing professionals.
PAULA: I’m your host, Paula Thomas.
PAULA: And if you work in loyalty marketing, join me every week to learn the latest ideas from loyalty specialists around the world.
PAULA: So welcome to the latest episode of Let’s Talk Loyalty.
PAULA: And before I get into introducing my guest today, I first of all wanted to celebrate a mini milestone in that I’ve been able to get out of lockdown and get into my professional recording studio.
PAULA: So for the first time in three months, it’s fantastic not to be just working from home and to be back in a professional environment, obviously with mask in hand.
PAULA: But I have to say it feels really good to have a sense of normality.
PAULA: And the other thing I wanted to say is just a huge thanks to my friends in Epsilon, who introduced me to the fantastic guy we’re going to have a conversation with today.
PAULA: And I think all of you probably appreciate the amount of time and effort it takes really just to get somebody of this caliber on a call, particularly from a global brand and one that you all know and love.
PAULA: So without further ado, I am going to welcome Mitch Kennedy, who is the Global Loyalty Strategy Lead for Dell, based in Austin, Texas, to Let’s Talk Loyalty.
MITCH KENNEDY: Thanks for the invite.
MITCH KENNEDY: I appreciate it.
PAULA: Great to have you here, Mitch, and I know you’ve been off on leave, so it’s probably crazy busy on your end, but I’m super happy to get into your calendar before anything else does.
MITCH KENNEDY: Yeah, it’s the adjustment coming back from having taken a week off.
MITCH KENNEDY: Just mentally get yourself to re-engage and yeah.
PAULA: Don’t open the email for a while.
PAULA: I think that’s my advice.
MITCH KENNEDY: Exactly.
PAULA: Great stuff.
PAULA: So Mitch, listen, there’s so many fantastic subjects we’ve talked about before offline.
PAULA: You’re doing some amazing work there with the Dell Advantage Loyalty Program.
PAULA: But before we get into all of your kind of career, background and some of your favorite loyalty topics, I just first of all wanted to start with my usual question, which is, what is your favorite loyalty statistic?
MITCH KENNEDY: It’s funny, and this is an old statistic and it’s not one of like sort of earth shattering inside a revelation.
MITCH KENNEDY: But I always come back to the idea, and like I said, the statistic is old, but I read a number of years ago that in the US, the average person is a member of 18 loyalty programs and engaged in one.
MITCH KENNEDY: And I always try to keep that in mind because it’s very easy, particularly in a larger organization when you have people trying to sort of push down KPIs on you and membership is one of them.
MITCH KENNEDY: And I always have to sort of use that statistic.
MITCH KENNEDY: It’s like the one that I throw out all the time to say, listen, membership isn’t a KPI.
MITCH KENNEDY: I don’t really care how big the program is.
MITCH KENNEDY: That doesn’t speak to efficacy.
MITCH KENNEDY: I could streamline membership if you want to pay me a bonus on how many members I have.
MITCH KENNEDY: I’ll be a rich man.
MITCH KENNEDY: I can make that work.
MITCH KENNEDY: But that doesn’t mean that I’m driving positive outcomes.
PAULA: Sure, sure.
PAULA: Brilliant.
PAULA: Well, my god, 18 to 1.
PAULA: And I know they vary around the world, Mitch.
PAULA: But certainly, I know how few loyalty programs I engage with.
PAULA: And this is our profession.
PAULA: So you’re absolutely right.
PAULA: We often sign up and we don’t we don’t bother after that.
PAULA: So it’s a tough job we’re doing.
MITCH KENNEDY: Right.
MITCH KENNEDY: And I always think it’s interesting too.
MITCH KENNEDY: And I’m curious if you and the people listening are the same way when you’re in a store and they ask you, do you want to join the loyalty program?
MITCH KENNEDY: Yeah, someone who actually manages loyalty programs.
MITCH KENNEDY: Yeah, if I sign up, it’s out of curiosity.
MITCH KENNEDY: But for the most part, I’m like, no.
PAULA: You know, I see it as a direct challenge, Mitch.
PAULA: So I use that particular question to test whether they’ve executed well, so whether they’ve trained their staff.
PAULA: So I’m a nightmare customer.
PAULA: If you want to ask me to join your loyalty program, I’m going to ask why.
PAULA: And I’m really going to dig into, can they articulate that?
PAULA: Because again, there’s no point building a loyalty program if they’re not passionate about it at the point of sale.
PAULA: So yeah, I’m a tough customer.
MITCH KENNEDY: Yeah, exactly.
MITCH KENNEDY: I was at a store yesterday, actually, and I had a very unique experience where as I was checking out, it came up on the screen to join the loyalty program.
MITCH KENNEDY: And the person checking me out told me to click no.
PAULA: What?
MITCH KENNEDY: Yeah, they just said, oh, you know, because you go through the screens.
PAULA: The hassle.
MITCH KENNEDY: Yeah.
MITCH KENNEDY: And then the person was like, check no.
PAULA: Oh, no.
MITCH KENNEDY: I’m like, you know, yeah, exactly.
MITCH KENNEDY: You guys have gotten off the rail somewhere here.
MITCH KENNEDY: I don’t think that was the preferred customer experience.
PAULA: No, no.
PAULA: My God, that’s hilarious.
PAULA: Well, hopefully nobody does that with the Dell program.
MITCH KENNEDY: Yeah.
MITCH KENNEDY: It just goes to show you too, when you have a retail outlet, at the end of the, you know, you can sit back and have all of these very imaginative, very innovative processes.
MITCH KENNEDY: But at the end of that trail, it is going to be an employee that probably doesn’t care all that much.
MITCH KENNEDY: And so you’re going to take that into account.
PAULA: Yeah, brilliant, brilliant.
PAULA: So I’d love to get a sense of your program, first of all, Mitch.
PAULA: I know you’ve done, I think it’s over five years now, in a number of roles with Dell.
PAULA: And the Advantage program, I didn’t know a lot about actually.
PAULA: It’s not a program I’d seen in my home country of Ireland, for example.
PAULA: I don’t think it’s live here in the UAE, but obviously it’s a massive program in the US, Canada, I think Brazil and lots of other countries around the world.
PAULA: So tell us exactly about the program.
MITCH KENNEDY: Well, from a loyalty perspective, Dell is a unique entity in that we have a really long purchase cycle.
MITCH KENNEDY: So the Dell Advantage program, it has evolved quite a bit over the last number of years, and it’s about to evolve a great deal more.
MITCH KENNEDY: As it’s currently constructed, it’s basically a transactional rewards program.
MITCH KENNEDY: We pay out transactional rewards at sets amounts based on revenue generated from select customer groups.
MITCH KENNEDY: The outcome of that, the objectives as currently constructed are pretty straightforward.
MITCH KENNEDY: We’re looking to drive transaction velocity, maintain some level of engagement in between large purchases and get loyalty outcomes basically out of that.
MITCH KENNEDY: Very narrow, sort of defined program benefit.
MITCH KENNEDY: We’re evolving that to a much more nuanced, much more expanded program that’s more focused on the customer experience.
MITCH KENNEDY: But it’s currently constructed, it’s a very transactional program.
MITCH KENNEDY: Now, to be fair, it does that effectively.
MITCH KENNEDY: I’m not discounting the impact of that, but realistically right now, as we’re currently constructed, we’re buying transactions.
MITCH KENNEDY: We’re doing that thoughtfully and selectively.
MITCH KENNEDY: But at the end of the day, that’s what we’re doing.
PAULA: Okay.
PAULA: And it is a consumer program and a small business program, am I right?
MITCH KENNEDY: Correct.
MITCH KENNEDY: Correct.
MITCH KENNEDY: Currently active in US, Canada, Brazil, UK.
PAULA: Okay, fantastic.
MITCH KENNEDY: And we have some mini programs in other markets that I’m using to test some new concepts, or I’m about to use it to test new concepts.
PAULA: Wonderful.
PAULA: Wow.
PAULA: Okay.
PAULA: Well, we’ll definitely get in.
PAULA: I think we discussed, I think we’re both mutually fascinated by the concepts of gamification.
PAULA: And as you said, transactional programs, they have a logic, they have a function, they definitely drive some behavior.
PAULA: But I think as the world evolves, there’s definitely a need to be more engaging.
PAULA: So are you at the early stages of that or where are you at?
MITCH KENNEDY: Very early stages, but we have a sort of organizational commitment to walk that path.
MITCH KENNEDY: And given that’s a testament to Dell, in that given Dell size and complexity of the business, that’s not an easy path to walk, right?
MITCH KENNEDY: You’re committing to some level of pain in the short term to make that level of change.
MITCH KENNEDY: And one of the things I like about Dell is organizationally I’ve seen a lot of courage.
MITCH KENNEDY: You can be, I come from sort of an entrepreneurial background and I was really worried about working for a large company because I was afraid that I couldn’t be innovative.
MITCH KENNEDY: And what I’ve been pleasantly surprised by was, is Dell’s sort of willingness to take a unique look at something.
MITCH KENNEDY: I mean, to sit in a meeting and have and to be able to say, I don’t know that we’re asking the right question and to have people stop and go, okay, well, let’s talk about that.
MITCH KENNEDY: What is the right question?
MITCH KENNEDY: And to me, that’s where innovation comes from, is the ability to step back and redefine the question.
MITCH KENNEDY: And Dell has an organizational willingness to do that that I’ve found very surprising.
MITCH KENNEDY: And that for me, that makes it very exciting, because I can be innovative at scale.
MITCH KENNEDY: Though I was laughing the other day, I said, when I sold Dell on the idea of making some pretty dramatic changes.
PAULA: Yeah.
MITCH KENNEDY: You know, having a point of view is all well and good until a $100 billion company goes, okay, let’s do it.
MITCH KENNEDY: And then you’re like, whoa, whoa, whoa, I thought we were just two guys talking here.
MITCH KENNEDY: I’m not willing to go that far.
MITCH KENNEDY: I mean, I’m not saying I’m right.
MITCH KENNEDY: I just, so it’s exciting times.
MITCH KENNEDY: We’re in the process of sort of reimagining ourselves.
PAULA: But it takes a lot of courage as well for you, Mitch, even to take that approach, because as you said, the whole thing, it can go lots of different ways.
PAULA: There’s lots of unforeseeable factors.
PAULA: I know you’re a very curious man.
PAULA: You’ve told me you read a lot.
PAULA: And there’s some amazing concepts out there, which I know you’re just dying to try.
MITCH KENNEDY: Yeah, you know, my wife had argued that I’m often wrong, but never uncertain.
MITCH KENNEDY: And so, yeah, I have a willingness to say.
MITCH KENNEDY: Actually, you know, it’s funny.
MITCH KENNEDY: I think there’s, loyalty is an interesting thing to me, in that there’s been a lot of very smart people that have done a great deal of research.
PAULA: Yeah.
MITCH KENNEDY: And so there’s a lot of knowledge, there’s a great deal of knowledge base out there that you can tap into.
PAULA: What happens to loyalty when the customer never visits your loyalty program?
PAULA: Today, customers are using AI to discover brands, evaluate options and make purchase decisions, changing the traditional path to engagement.
PAULA: Phaedon is leading the discussion on what this shift means for loyalty leaders, where brands risk becoming invisible, and how organizations can prepare for a future where AI sits between the customer and the brand.
PAULA: Reserve your spot at loyaltyinsiders.com.
PAULA: That’s loyaltyinsiders.com.
MITCH KENNEDY: I would argue that my skill set is just basically a willingness to comb through that, find something that resonates with me, and having willingness to apply.
MITCH KENNEDY: Some of that comes from an entrepreneurial background.
MITCH KENNEDY: To get clients, basically, you had to be willing to propose a course of action that wasn’t apples to apples.
MITCH KENNEDY: I always laughed, no one got fired for hiring IBM.
MITCH KENNEDY: They hired Joe Blow and his merry band of consultants from some no-name agency.
MITCH KENNEDY: They could get fired.
MITCH KENNEDY: That’s where it came from.
PAULA: Dell hired Mitch Kennedy.
MITCH KENNEDY: Yeah.
PAULA: Well done, Dell.
MITCH KENNEDY: Yeah, it was funny.
MITCH KENNEDY: I started at Dell and I was just doing analytics.
PAULA: Okay.
MITCH KENNEDY: And so it was an interesting experience to sit down.
MITCH KENNEDY: And my first day, they gave me all these dashboards.
MITCH KENNEDY: And it was very interesting and then I’m like, these aren’t the right questions.
MITCH KENNEDY: Like you’re not looking at the right data here.
MITCH KENNEDY: Like what are the objectives here?
MITCH KENNEDY: What are you trying to accomplish?
MITCH KENNEDY: And then let’s talk about whether there’s a path to get there.
MITCH KENNEDY: And so pretty quickly, I think, I sort of migrated out of that role.
PAULA: Okay.
MITCH KENNEDY: But yeah, it was interesting.
MITCH KENNEDY: I was the first big boy company I worked for where…
PAULA: Where you were led to have an entrepreneurial mindset because I know that’s where you came from.
PAULA: Tell us exactly the kind of background.
PAULA: It was much more startup land, wasn’t it?
PAULA: In terms of your career?
PAULA: Oh, yeah.
MITCH KENNEDY: Actually, it was interesting.
MITCH KENNEDY: My first foray into anything similar, close to loyalty, I had started a yield management company in the travel industry, specifically golf.
MITCH KENNEDY: But we envisioned ourselves as a software company.
MITCH KENNEDY: We had to make a pretty rapid transition when we ran out of money and we had the choice between having to go home and tell our wives that, maybe we’re going to make the house payment or find a new way to do this.
MITCH KENNEDY: What we figured out was that no one really knew how to use this great software.
MITCH KENNEDY: We flipped it on its head and turned it into basically, we will use the software on your behalf.
MITCH KENNEDY: As little as we knew, we seemed to know more than anybody else.
MITCH KENNEDY: That was disturbing on one level and an opportunity on another.
MITCH KENNEDY: That’s what opened it up, the member-based efforts to drive loyalty outcomes.
MITCH KENNEDY: How do I drive?
MITCH KENNEDY: I didn’t recognize it as loyalty at the time.
MITCH KENNEDY: I just do now, do looking back.
MITCH KENNEDY: How do I drive frequency?
MITCH KENNEDY: How do I drive engagement with my clients and all of that?
PAULA: Wonderful.
PAULA: I used to work in the airline industry actually, Mitch, many years ago.
PAULA: And I always said, it’s the yield management guys have all the power.
MITCH KENNEDY: Yeah, you know, what was funny, we did.
MITCH KENNEDY: We were so wrong about so many things.
MITCH KENNEDY: And it was funny because you, there’s great outcomes in being wrong sometimes.
MITCH KENNEDY: What we found was that we could not get somebody to spend more money on golf.
MITCH KENNEDY: We could just shape where they spent it.
PAULA: Okay.
MITCH KENNEDY: And I can remember talking to, I’m the one that did all the business development.
MITCH KENNEDY: And so I remember talking to a guy and he was like, oh my gosh, that’s extortion.
MITCH KENNEDY: And I was like, no, I know it’s not.
MITCH KENNEDY: And then I remember getting in my car going, kind of.
MITCH KENNEDY: I mean, like who owns the customer owns a great deal.
MITCH KENNEDY: And by applying sort of best practices from a loyalty and engagement perspective, you own the customer.
PAULA: Yeah.
MITCH KENNEDY: And that was sort of the objective.
MITCH KENNEDY: And I kind of opened my eyes to that.
MITCH KENNEDY: And then once I moved from there, I started seeing, and then I started getting some exposures of point-based systems.
MITCH KENNEDY: And then that sort of opened up gamification and some other things.
MITCH KENNEDY: It’s very easy in a point-based system to get off track.
PAULA: Sure.
PAULA: Oh, of course.
PAULA: Absolutely.
MITCH KENNEDY: And I always say in loyalty, like it’s very easy to change.
MITCH KENNEDY: It’s just very hard to change back.
PAULA: Yeah.
MITCH KENNEDY: You’ve got to be really careful.
MITCH KENNEDY: People go, Oh, how hard would it be to do whatever?
MITCH KENNEDY: It’s not a problem at all.
MITCH KENNEDY: It’s very hard to get out of that if we’re wrong.
MITCH KENNEDY: And so you have to be a little careful.
PAULA: So how did you end up in Dell?
PAULA: And really, I mean, it’s such a different lifestyle and a corporate experience, you know?
PAULA: I mean, what tempted you there and how does it compare?
MITCH KENNEDY: You know, it’s funny, I took the job to be Frank Adell.
MITCH KENNEDY: I didn’t, it was a test.
MITCH KENNEDY: I just wanted to see what it was like and then I found out that I really liked it.
MITCH KENNEDY: At the time, I just, I needed something, I needed a break from doing the entrepreneurial bit.
MITCH KENNEDY: Yeah.
MITCH KENNEDY: Yeah, and having employees is, I can remember, we had a technical problem and I had to go and visit clients, explain what was happening and I remember being on the plane thinking, I have the livelihood of all of my employees’ families in my hand and I had one key employee who was very excited because their daughter was going off to college and the weight of that was just so great.
MITCH KENNEDY: If you’ve never been in that position, you may not realize just how all encompassing that is.
MITCH KENNEDY: But I remember being on the plane thinking, if I can’t deal with this problem successfully, I’m going to have to let some people go.
MITCH KENNEDY: I mean, yes, it’s going to impact the finances of my family, but it’s going to impact even more than that.
MITCH KENNEDY: And so that was an experience.
MITCH KENNEDY: And to be honest, I needed a little bit of a break.
PAULA: Sure.
MITCH KENNEDY: I remember when I started at Dell coming out of a meeting and someone saying, oh, boy, that was stressful.
MITCH KENNEDY: You may not be used to that.
MITCH KENNEDY: It was like, oh my gosh, that was war with Nerf guns.
MITCH KENNEDY: It’s like, there’s no stress there.
MITCH KENNEDY: Like, no one’s losing their job.
MITCH KENNEDY: I’m not, like, if I’m wrong, I don’t have to look at someone and say, I’m very sorry, but I don’t, I can’t keep you, you know what I mean?
MITCH KENNEDY: Like, nah.
PAULA: It’s a whole different discussion.
MITCH KENNEDY: Yeah, it is totally different.
MITCH KENNEDY: And solving problems with almost no resources.
MITCH KENNEDY: You know what I mean?
MITCH KENNEDY: Like, the first loyalty platform I put together, it was, like, gamification is the best example.
PAULA: Okay.
MITCH KENNEDY: Someone was saying, well, how do we know this works?
MITCH KENNEDY: And I’m thinking, because I’ve done millions of entries and I did them on a system that was like a caveman drawing pictures in the dirt with a stick compared to what’s available now.
MITCH KENNEDY: And so, you know, the psychology behind it is strong, I promise you, because what I had lacked, nuance.
MITCH KENNEDY: You know what I mean?
MITCH KENNEDY: It was pretty rough.
PAULA: So I know you found gamification and I know that’s your core passion now in terms of loyalty.
PAULA: So that’s the direction I gather you’re going to take the Dell program.
PAULA: So tell me how you got into the gamification side and why is it that you believe that that’s, I suppose, the next big thing and the model that’s going to be most effective for you?
MITCH KENNEDY: Yeah, you know, it’s funny, gamification, for me, is it does a couple of things amazingly well.
MITCH KENNEDY: By leveraging gamification, you can get members to engage in content more frequently and more deeply than they would otherwise.
MITCH KENNEDY: And you can create a varied reward structure.
MITCH KENNEDY: In any type of cash based reward structure, it’s been my experience and research shows that it’s an amazing short term driver of behavior, but only for the short term and that it gets more expensive over time.
PAULA: Sure.
MITCH KENNEDY: And making it variable, you can extend that.
MITCH KENNEDY: I got into gamification, to be honest with you, because I had a client without naming names, or even what the name of my agency was, because then someone could back into it, but they had released a cash-based reward into a point system.
PAULA: Okay.
MITCH KENNEDY: And they needed some way to lower the cost of points issued and redeemed.
MITCH KENNEDY: And like I said before, you can’t just put an Amazon card in there and go, oh gosh, we shouldn’t have done that.
MITCH KENNEDY: We’re going to take it back.
MITCH KENNEDY: Members tend to frown on that, and they express that by going elsewhere.
MITCH KENNEDY: And so I needed a way to sort of relieve that pressure.
MITCH KENNEDY: And so I made a number of changes.
MITCH KENNEDY: But one of the things I did is I actually released entries to games of chance as a redeemable reward option.
PAULA: Nice.
MITCH KENNEDY: And so people were redeeming $2 and $3 worth of points for something that costs $0.10, $0.08.
PAULA: Of course.
PAULA: Yeah.
MITCH KENNEDY: And I had done a bunch of research before doing this.
MITCH KENNEDY: I didn’t know.
MITCH KENNEDY: To be frank, I didn’t know anything about it.
MITCH KENNEDY: I had the idea sitting on a plane.
MITCH KENNEDY: And so when I got to my hotel that night, I started doing all this research.
MITCH KENNEDY: And there’s a great deal of research out there.
MITCH KENNEDY: And I found this fantastic dissertation written by, and I’ve always laughed because the dissertation written by a Ph.D.
MITCH KENNEDY: student in behavioral psychology.
MITCH KENNEDY: And I based massive program changes on this dissertation.
MITCH KENNEDY: And I remember as I was doing it thinking, I don’t know what grade she got.
MITCH KENNEDY: Her professors may have gone, yeah, this isn’t even close to being true.
MITCH KENNEDY: And yet I was basing all of this stuff on.
MITCH KENNEDY: But it was just such a compelling, she cited all this research going back generations.
MITCH KENNEDY: And I can say without reservation, it’s proven to be completely true.
MITCH KENNEDY: The idea behind it was basically this concept of preference reversals.
MITCH KENNEDY: That if you take a game, entries to a game of chance, and you put them in front of, you put two entries to two different games of chance in front of somebody, and you ask them, what’s the better game?
PAULA: Okay.
MITCH KENNEDY: They will say the one with the best odds of winning.
MITCH KENNEDY: But if you ask them to put a monetary value on entries to the games of chance, they put the higher monetary value on the game with the greatest, the most appealing grand prize, regardless of odds of winning.
PAULA: Really?
MITCH KENNEDY: And I found that to be amazingly true, to the point where the odds of winning are meaningless, beyond a willingness to look at yourself in the mirror the next day.
MITCH KENNEDY: And so it allowed me a great deal of flexibility in controlling cost, controlling sort of what’s there, and shaping games based on sort of what’s the underlying psychology and how they’re going to respond to it.
MITCH KENNEDY: And what was interesting is that the psychology behind it is so great.
MITCH KENNEDY: And I’m a big believer in that having people lose isn’t a bad thing.
PAULA: Of course not.
MITCH KENNEDY: Yeah, but a lot of people will have, if you talk to people about a game of chance, they have a heart attack.
MITCH KENNEDY: Well, oh, my gosh, what about the people who lose?
PAULA: Yeah.
PAULA: No.
PAULA: No.
PAULA: They’ve had an experience.
PAULA: Yeah.
MITCH KENNEDY: Exactly.
MITCH KENNEDY: Exactly.
MITCH KENNEDY: And so the difference for me is it’s that engagement.
MITCH KENNEDY: It’s that sort of interacting with that content that allows them to be more fully engaged in what’s there.
MITCH KENNEDY: You know, if you send an email out with content, we all do it, right?
MITCH KENNEDY: Like, it’s the subject line and maybe, and I mean, the first time a bit cynical on a lot of this, largely because it’s not my area of expertise and therefore, yeah.
MITCH KENNEDY: But with the game, I mean, I sent out a change in terms of conditions, embedded it in the game and I had tens of thousands of people play the game, engage content and answer questions about program terms and conditions on the backside.
MITCH KENNEDY: They would never have done that.
MITCH KENNEDY: If I had sent that out in the email, people would have thought I was crazy.
MITCH KENNEDY: But in the game, no one even, and my reward mix was, I mean, it was so small.
MITCH KENNEDY: But it doesn’t matter.
MITCH KENNEDY: People engage it and they’re happy.
PAULA: So what do you think is the key success factor then, Mitch, in in-gamification?
PAULA: Like, is it the big dream, you know, as you said, that reward mix and just getting one big halo prize?
PAULA: Is it about the visual design of the game and how easy it is to understand?
PAULA: Or tell us a bit about how you would design something like that.
MITCH KENNEDY: What’s interesting to me is it’s definitely about the instant gratification.
PAULA: Okay.
MITCH KENNEDY: Like, if you look at it as sweepstakes, I don’t consider sweepstakes to be sort of viable gamification, because I describe sweepstakes as it’s like a casino that has a blackjack table or a roulette table.
MITCH KENNEDY: For those of you who aren’t gamblers, you drop the ball and it lands on the number.
MITCH KENNEDY: It’s like you walked up to the roulette table and you said, listen, here’s $100, put it on red.
MITCH KENNEDY: Then you went up to your room and you may or may not have won, and if you didn’t, no one will ever talk to you again, you’ll never hear about it.
MITCH KENNEDY: Not a very engaging game and not one you’re going to play very frequently.
PAULA: Sure.
MITCH KENNEDY: It’s a difference between that and them spinning the wheel, you watching the ball drop and seeing whether you won right there.
MITCH KENNEDY: If that’s the case, you’re more willing to do that over and over and over again.
MITCH KENNEDY: One of the things that stunned me about gamification is that people will engage it over and over again.
MITCH KENNEDY: I’ll never forget, we had one person redeem $3 worth of points to play one of the games 67 times in a month.
PAULA: Wow.
MITCH KENNEDY: My first thought was, oh my gosh, we had a technical issue.
MITCH KENNEDY: We just drained points out of this poor guy’s account.
MITCH KENNEDY: My dad, no, there was no technical issue.
MITCH KENNEDY: This guy did it willingly.
MITCH KENNEDY: I’m like, okay, well, then let’s call this guy and figure out.
MITCH KENNEDY: No, he’s totally fine with the experience.
MITCH KENNEDY: The interesting thing is for $3, he could have redeemed for most of the prizes in the game.
MITCH KENNEDY: Anyway, that keyed me into how strong the psychology is on that.
MITCH KENNEDY: It just allows me to breadcrumb behavior through a larger ecosystem, because people will do so much more for an entry to a game that costs you pennies, than they will for a $4 reward, $5 reward.
MITCH KENNEDY: It allows me to solve problems at scale, move members through complex decision trees, identify points in the customer experience, where people stall out, and give it a little boost to get them through to the next level, to get them to engage in content that they wouldn’t have otherwise.
MITCH KENNEDY: It’s fantastic for training.
MITCH KENNEDY: But to be clear, it is a tool in a larger program, as opposed to a program in and of itself.
MITCH KENNEDY: Sure.
MITCH KENNEDY: You can overdo it, you can take it too far, it can become too frequent.
MITCH KENNEDY: And the psychology behind it, it’s a bit binary in that, in my experience, for those it engages.
MITCH KENNEDY: Oh my gosh, it can engage them to a frightening degree.
MITCH KENNEDY: For some people, it doesn’t really resonate with them.
MITCH KENNEDY: So you have to be a little careful.
MITCH KENNEDY: But anyway, that’s been my, I’m a huge proponent of it and I use it all the time, but definitely as one piece of a larger puzzle.
PAULA: Strategy.
MITCH KENNEDY: Yeah.
MITCH KENNEDY: Yeah.
MITCH KENNEDY: But what’s interesting, what I think most people don’t realize is they think of it as the psychology behind it to be like computer gaming.
MITCH KENNEDY: And it’s less of that and more obviously, it’s not probably the best way to put it, but it’s more akin to gambling than.
PAULA: Yeah.
MITCH KENNEDY: And if you think about the, if you walk into a casino in any casino in the world, you see sort of a pretty broad based cross section across ethnicity, gender, everything.
MITCH KENNEDY: And so it has a really broad based appeal and that helps.
PAULA: Exactly.
PAULA: Yes.
PAULA: So it is personality.
PAULA: It’s not a particular income or anything else or demographic.
PAULA: It’s very much, yeah.
PAULA: Yeah.
PAULA: Because, for example, I went to Vegas and I was bored out of my tree.
PAULA: I was just like, when can I get out of here?
PAULA: I mean, literally doesn’t appeal to me.
MITCH KENNEDY: Yeah.
MITCH KENNEDY: That’s funny too.
MITCH KENNEDY: I’m a huge proponent of gamification and I’m not someone who gambles.
MITCH KENNEDY: I was in Vegas.
MITCH KENNEDY: We’ve all, if you do any business in the US and you go to any conference, you’re in and out of Vegas somewhat frequently.
MITCH KENNEDY: And I remember I was just walking up to my room and I don’t normally carry cash, but I had 20 bucks.
MITCH KENNEDY: I stopped at a blackjack table, played like four or five dollar hands or something, lost my money in about 30 seconds.
MITCH KENNEDY: And I remember getting in the elevator going, that was so unfulfilling.
PAULA: Exactly.
PAULA: Yeah, exactly.
MITCH KENNEDY: That did absolutely nothing for me.
MITCH KENNEDY: I could have, yeah, spent that money in almost any other way and gotten a better outcome.
PAULA: But for some, it’s really strong.
PAULA: Totally.
PAULA: But no, what I really like about what you’re saying, Mitch, though, is its relevance, particularly in industries that have very tight margins.
PAULA: And I’ve seen, you know, gamification working super well, particularly in fuel retail programs.
PAULA: And I mentioned one in Ireland, for example, called Player Park, which was an extraordinary program.
PAULA: And so and that’s clearly what’s happening in Dell as well.
PAULA: You know, you’re moving in the direction of engagement when literally the margins are tight.
MITCH KENNEDY: Well, and also too, I think that that’s absolutely true.
MITCH KENNEDY: But also too, we live in, we’re entering this sort of big data world where we all have access to so much more data and we can apply machine learning to it and take much more nuanced looks at the customer journey.
MITCH KENNEDY: And so we can identify non-transactional behaviors that are incredibly valuable, incredible indicators of potential value and drivers of member value that are too far removed from the transaction to directly reward at a level that would actually drive the behavior.
MITCH KENNEDY: And gamification allows you to lean on that, that behavior in a way that’s economically viable.
MITCH KENNEDY: You know, if I know that you, updating your profile within the first 30 days, for instance, of sign up, it makes you more likely to be engaged at a year.
MITCH KENNEDY: I can’t really, I can’t, it’s unlikely, I should say, that I can reward you at a level that’s going to make you do that.
MITCH KENNEDY: But using gamification, I can sort of lead you through that and do that in a way that’s economically viable.
PAULA: Okay.
PAULA: And there is still, I guess, then a value exchange as well, whereas at least I get the fun to go, okay, cool, that was really good fun.
PAULA: And I like this brand more.
PAULA: So there’s kind of a halo effect and you get the data that you need without any investment.
MITCH KENNEDY: Absolutely.
MITCH KENNEDY: And it’s funny.
MITCH KENNEDY: That’s exactly the way I described it too.
MITCH KENNEDY: That’s why I started kind of smiling.
PAULA: Yeah.
MITCH KENNEDY: There is a value exchange.
MITCH KENNEDY: And for people who don’t, they look at it and go, oh, it’s just a silly little game.
MITCH KENNEDY: You have any idea how much time the average person spends on their phone?
PAULA: Yeah.
MITCH KENNEDY: Doing some, there is a value to it.
MITCH KENNEDY: And if structured correctly.
MITCH KENNEDY: And so one of the things that I always do is, is I go through sort of a set when I’m working with, with stakeholders to build a game.
MITCH KENNEDY: Always starting with the objective because sometimes it’s just for it to be fun.
MITCH KENNEDY: We’ll do that in our, in our gaming community, right?
MITCH KENNEDY: Sometimes the games are, there’s no value to them other than it’s just sort of fun.
MITCH KENNEDY: And it’s a way for them to interact with a brand that’s positive.
MITCH KENNEDY: It’s not earth shattering.
MITCH KENNEDY: We’re not curing cancer, we’re selling computers, right?
MITCH KENNEDY: Like at the end of the day, sometimes just being fun is okay.
MITCH KENNEDY: And yeah, sometimes I want them to engage content.
MITCH KENNEDY: Sometimes you know what I mean?
MITCH KENNEDY: Like, but there is, even for the losers, there’s a value exchange.
MITCH KENNEDY: And we see an increase in positive outcomes, even from those who lose.
MITCH KENNEDY: But oh my gosh, did I have to document that.
MITCH KENNEDY: Because I’m sure people were very, and I always say to you, if everybody wins, did anybody?
MITCH KENNEDY: Do you mean if I play a game and I won, but everyone else did as well?
MITCH KENNEDY: It’s not the same charge as if somebody lost.
MITCH KENNEDY: I mean, that sounds terrible.
MITCH KENNEDY: And you think, gosh, you know, are we really that bad?
MITCH KENNEDY: But yeah.
PAULA: We’re a competitive species, Mitch.
PAULA: There is absolutely no doubt.
MITCH KENNEDY: Yeah.
MITCH KENNEDY: And you know, it’s funny, one of the first books I read on gamification, they talked about sort of that competitive drive.
MITCH KENNEDY: And they always talked about one of the things, I just always remember this because I’m an avid recreational tennis player, and I want to stress avid as opposed to accomplished or good.
PAULA: Okay.
MITCH KENNEDY: But I am avid.
MITCH KENNEDY: And that’s one of the key indicators of, for some reason, tennis is one of the key indicators of a competitive personality.
PAULA: Really?
MITCH KENNEDY: Yeah.
MITCH KENNEDY: I always thought that was somewhat interesting.
MITCH KENNEDY: But anyway, totally, totally off topic.
MITCH KENNEDY: But yes, we’re all competitive.
MITCH KENNEDY: And so, for it to be really effective, you need to have, in my opinion, you need to have losers.
MITCH KENNEDY: In my experience, I should say.
MITCH KENNEDY: Yes.
PAULA: Yes.
MITCH KENNEDY: And so, there are times when I’ll set up a game and everybody wins.
MITCH KENNEDY: And to be honest with you, my objective is to issue the rewards.
MITCH KENNEDY: I’m just layering in the game to get them to engage a little bit of content and to create some breakage.
MITCH KENNEDY: Make them take a step towards me before I give them something in return.
PAULA: Sure.
MITCH KENNEDY: But the reality is I’m not, my objective isn’t brand engagement.
MITCH KENNEDY: I’m trying to give you a transaction reward and I’m going to follow up with, I have a marketing plan for how I’m going to follow that up and I’m going to, I want to issue rewards in a broad-based way.
MITCH KENNEDY: And I want to get you to take a step towards me so I don’t have to issue quite, I don’t have quite the liability out there.
MITCH KENNEDY: And so that’s the one time I won’t have winners.
MITCH KENNEDY: Or excuse me, I won’t have losers.
PAULA: You won’t have losers.
MITCH KENNEDY: Yeah.
MITCH KENNEDY: But for the most part, I like having losers.
MITCH KENNEDY: And that’s not, I’d start a little bit more engaging.
PAULA: Yeah, no, I totally get it, Mitch.
PAULA: But what kind of resistance internally would you expect?
PAULA: So again, thinking about people listening to the show who may not have considered gamification as a strategy previously.
PAULA: You’ve mentioned the casino piece, and I think there’s sometimes a bit of nervousness.
PAULA: Obviously, legality has to be checked.
PAULA: Every country’s got its own ins and outs and complexity, but what, just from a purely strategic perspective, what should they be thinking about in terms of a gamification loyalty strategy?
MITCH KENNEDY: It is a way for you to…
MITCH KENNEDY: The way I sold it internally was that you tell me what you want more of and I’ll get it for you, and I’ll do it cheaply.
MITCH KENNEDY: And I’ll do it in a way that people will enjoy.
PAULA: Okay.
MITCH KENNEDY: Which sounds strange, but getting someone to interact with your brand in a way that they enjoy is a win in and of itself.
MITCH KENNEDY: That’s the value exchange.
PAULA: Gotcha.
MITCH KENNEDY: And so that’s kind of how I sold it internally.
MITCH KENNEDY: And I walked people through sort of a waterfall.
MITCH KENNEDY: This is…
MITCH KENNEDY: How many people would like send out an email, for instance, right?
MITCH KENNEDY: This is the waterfall.
MITCH KENNEDY: We’d expect this open rate, this game engagement rate, we would expect.
MITCH KENNEDY: And it was very interesting, you know, to watch people sort of have their eyes open to sort of the possibilities.
MITCH KENNEDY: But even at that, they allowed me to test it.
MITCH KENNEDY: And that’s one of the things I like about Dell.
MITCH KENNEDY: So they’ll allow you to test it.
MITCH KENNEDY: And I’m a big believer in testing ideas and concepts.
MITCH KENNEDY: Because if…
MITCH KENNEDY: And I even say, listen, to be innovative, you have to be willing to fail.
MITCH KENNEDY: And so you need to structure tests in a way to give you a way to back out.
MITCH KENNEDY: And so when I first started testing gamification, I did it in our gaming community.
MITCH KENNEDY: Not because…
MITCH KENNEDY: Gamers are actually the worst audience for it.
MITCH KENNEDY: So it was not…
PAULA: Interesting.
MITCH KENNEDY: Yeah, they’re not the game.
MITCH KENNEDY: Because they were like, hey, I did really well in this game.
MITCH KENNEDY: I don’t understand why they get more rewards.
MITCH KENNEDY: Like it’s just a game of chance.
MITCH KENNEDY: There’s not…
MITCH KENNEDY: Yes.
PAULA: They’re too well-educated, huh?
MITCH KENNEDY: Oh, exactly.
MITCH KENNEDY: They had much higher expectations for the graphics, for the game and everything.
PAULA: Wow.
MITCH KENNEDY: Yeah.
MITCH KENNEDY: I tested it in a way that I could back out of if I didn’t get the outcome I wanted.
MITCH KENNEDY: And so I just…
MITCH KENNEDY: I have slowly sort of pushed it out into more and more parts of the business.
MITCH KENNEDY: And as we sort of evolve the program, it will play a larger role in how we collect data and how we…
MITCH KENNEDY: Because one of the things to remember about gamification is it allows you to ask something in return for giving them a reward.
MITCH KENNEDY: I ask you to opt in.
MITCH KENNEDY: I ask you to answer a question.
MITCH KENNEDY: We all have marketing programs based on predictive models.
MITCH KENNEDY: Those predictive models hinge on a handful of data points.
MITCH KENNEDY: This allows you to collect meaningful data at scale.
MITCH KENNEDY: The one challenge, the one pre-visa I would say, and this is just me.
MITCH KENNEDY: I hate when someone asks me for a data point and then they don’t use it.
MITCH KENNEDY: If you ask me for a data point, I want it to shape the customer experience.
MITCH KENNEDY: I want it to shape how the brand interacts with me.
MITCH KENNEDY: And so the one thing with gamification is that it’s so easy to collect data that at times you’re collecting data just because you can.
MITCH KENNEDY: And then the customer is like, well, I already told you that.
PAULA: Exactly.
PAULA: Yeah, you’re not listening.
MITCH KENNEDY: Exactly, exactly.
MITCH KENNEDY: And so it allows you to, and that’s one of the dangers of it is that you can sort of collect more data than you can use.
MITCH KENNEDY: And that’s easy in today’s world.
MITCH KENNEDY: It’s much easier.
MITCH KENNEDY: We all, I think, probably know more about our customers than we can actually act on.
PAULA: Absolutely.
PAULA: And like I said earlier, actually, Mitch, you know, is in the same way that I’m a difficult customer in retail, if loyalty comes up as a subject, because I’ll never ask about it.
PAULA: I’m also on my birthday, very challenging to the brands that I’m a member of their loyalty program, because I’m sitting waiting for something to happen.
MITCH KENNEDY: Yeah, I know.
MITCH KENNEDY: And it usually doesn’t.
MITCH KENNEDY: I know.
MITCH KENNEDY: It’s like, jeez, it’s my birthday.
MITCH KENNEDY: Do I get a little kiss on the cheek here?
MITCH KENNEDY: Come on.
PAULA: Perhaps.
MITCH KENNEDY: Give me something.
PAULA: Exactly.
MITCH KENNEDY: Yeah.
MITCH KENNEDY: You know, the, it’s funny, you know, the challenge with being in loyalty is that you do have sort of weird, like I will go through again in excruciating detail, making observations as I go to my wife’s dismay, I’m sure, about what’s there, how they structure it, why they shouldn’t have done it this way or why they should have done it that way or oh my gosh, I really like this, I never thought of doing it this way.
PAULA: Yeah.
MITCH KENNEDY: And yeah, it’s so, I never have an organic reaction to anything.
MITCH KENNEDY: My reaction is always tend to like, will this make me look smarter if I could totally copy this?
MITCH KENNEDY: And I’m so willing to do that, by the way.
MITCH KENNEDY: So.
PAULA: Oh, completely.
PAULA: Yeah.
MITCH KENNEDY: I’m, there’s no, none of us need to be the ones that solve all problems, right?
MITCH KENNEDY: Like somebody else has had a great idea and all or part of it is probably applicable to what you’re doing.
PAULA: And there’s a great phrase, actually, which I really use regularly now, and it comes through.
PAULA: And I told you, I do a lot of work in fuel loyalty.
PAULA: And it’s literally copy with pride.
PAULA: And that is the way that entire industry approaches sharing of knowledge, sharing of ideas.
PAULA: And I just think it’s extraordinary because, again, I probably would have been a little bit guilty in the back, kind of, you know, in the past to go, okay, maybe this isn’t my concept and whatever, but now I’m like, no, copy with pride.
PAULA: Out we go.
PAULA: Here we go.
MITCH KENNEDY: Absolutely.
MITCH KENNEDY: It’s funny, as I’ve gone through my career, I will ask somebody to send something to me and I will be completely transparent.
MITCH KENNEDY: Could you stand up to me because I’m going to totally plagiarize crap out of that.
MITCH KENNEDY: I love that.
MITCH KENNEDY: And I’m going to take it.
MITCH KENNEDY: And yeah, a guy on my team made this comment one time and it was just so obvious, but I hadn’t thought of it in that way.
MITCH KENNEDY: And it was just, it’s totally changed when I think about transactional rewards.
MITCH KENNEDY: And he was just like, it’s demand.
MITCH KENNEDY: And I now envision transactional rewards as demand, but as a, this is going to sound really strange, but as a fluid, a fluid that I can direct around an ecosystem.
MITCH KENNEDY: So I can time when it gets to a certain point, I can time what points it touches and what point it doesn’t.
MITCH KENNEDY: And at first I gave him credit for that and I now give him the time, like listen, I’ve run out of ways to say, hey, you’re the one that had this idea, it’s now mine.
PAULA: Yeah, yeah, yeah.
MITCH KENNEDY: Just FYI, and I use it all the time.
MITCH KENNEDY: So five years from now, yeah, I could write a book and no one knew you exist.
PAULA: Absolutely.
PAULA: But I’m curious, Mitch, in terms of KPIs within Dell, you know, running the loyalty for such a big global brand, what is it that you that you measure, that you actively manage, I guess, because clearly, as you said, you can do all sorts of things.
PAULA: What is it that keeps you awake at night and that you’re really focused on driving?
MITCH KENNEDY: I’m a huge believer in objectives.
MITCH KENNEDY: And I started almost any discussion about loyalty with the objectives, right?
MITCH KENNEDY: Customer value and customer retention.
PAULA: Okay.
MITCH KENNEDY: And I get asked to do all of these things.
MITCH KENNEDY: I get asked, you know, we have to report out outcomes or someone tries to direct us in a certain area.
MITCH KENNEDY: I always come back to that.
MITCH KENNEDY: Listen, I’m looking to drive long-term value and retention.
MITCH KENNEDY: If what you’re asking me to do is outside of those, we can conceivably do that.
MITCH KENNEDY: But it’s not something that we’re currently pushing.
MITCH KENNEDY: And we get asked that we’re a large organization with a ton of teams.
MITCH KENNEDY: And so you’ll get someone that wants to know, like, what percentage of your members do what I, you know, something.
MITCH KENNEDY: And I always have to say, listen, that doesn’t dovetail with our objectives.
MITCH KENNEDY: It’s not something we’re trying to drive.
MITCH KENNEDY: So I can give you the number, but it’s just a number.
MITCH KENNEDY: It’ll go up or down based on things that are completely outside of the loyalty program.
MITCH KENNEDY: And I, when I first started Dell, it was interesting, you know, I had run large point-based systems previously and the people that were running the program had, and they’d asked me for some numbers.
MITCH KENNEDY: And I remember giving it to them and saying, listen, I don’t know you, but just take this piece of advice.
MITCH KENNEDY: You don’t control any of those numbers.
MITCH KENNEDY: So they’re good.
MITCH KENNEDY: Today, they’re good.
MITCH KENNEDY: They’re good because the organization as a whole is driving those numbers.
PAULA: Okay.
MITCH KENNEDY: Do not claim these numbers.
MITCH KENNEDY: State them as numbers because the business will shift.
MITCH KENNEDY: That number is going to go south and they’re going to go, hey, what happened?
MITCH KENNEDY: What are you doing?
PAULA: Yeah.
MITCH KENNEDY: You have to be a little careful in a large organization in that the KPIs are strange.
MITCH KENNEDY: We have a very small set of what I would call a KPI.
MITCH KENNEDY: Then we have a ton of metrics that we use as performance measurements that give us insight into what’s happening, but they’re not a KPI.
MITCH KENNEDY: They’re just, it’s a number that tells us something about the program.
PAULA: It’s time to worry or it’s time not to.
MITCH KENNEDY: Exactly.
MITCH KENNEDY: Exactly.
MITCH KENNEDY: Some of them are ones we don’t even control, but it’s just good to know.
MITCH KENNEDY: It gives you insight into what’s happening in the business as a whole.
PAULA: Wow.
PAULA: Okay.
PAULA: Well, I mean, actually, can I ask Mitch, it just occurred to me, how big is the team that runs Loyalty for Dell?
PAULA: So how many are you managing, I guess, directly?
MITCH KENNEDY: We have, Loyalty is, let’s think here, five people.
PAULA: My goodness.
PAULA: That’s tiny.
MITCH KENNEDY: It’s tiny.
MITCH KENNEDY: I know.
MITCH KENNEDY: Yeah.
MITCH KENNEDY: We met with another brand through Epsilon, and it was like a clown car.
MITCH KENNEDY: I mean, the conference room door opened and they kept coming in.
MITCH KENNEDY: I was like, oh my gosh, they’re so much bigger than ours.
PAULA: Wow.
MITCH KENNEDY: I remember when I had my agency, one of the clients was like, oh, I need to talk to the person who does this.
MITCH KENNEDY: Okay.
MITCH KENNEDY: Then by the time he’s done, he’s like, wait, you’re doing all of that?
MITCH KENNEDY: Yes.
MITCH KENNEDY: Of course, we have five employees.
MITCH KENNEDY: Yes, I’m the one that’s going to do all of those things.
MITCH KENNEDY: Dell’s a little bit that way as well.
MITCH KENNEDY: We don’t have very many people touching it.
MITCH KENNEDY: Now, obviously, we leverage a bunch of other teams and all of that.
MITCH KENNEDY: So, if we need to do creative, we need to.
MITCH KENNEDY: But the actual loyalty team is five people.
PAULA: Wow.
MITCH KENNEDY: I look at it as they are good.
MITCH KENNEDY: It’s a very high-quality team and they do amazing work.
PAULA: And indeed, that is totally reflective of anyone I’ve ever met with Dell.
PAULA: And I’m not just saying that because you’re on the call, Mitch.
PAULA: But as I said, I’ve had lots of friends work for Dell in Ireland.
PAULA: There’s a huge center there that manages the UK as well as Ireland.
PAULA: And even, actually, I’ve worked in recruitment over the years.
PAULA: And anyone who’s come from Dell just seems to be super sharp.
PAULA: So it’s a credit to the company, actually.
PAULA: I always like to know there’s very few companies that I would genuinely say.
PAULA: Actually, that’s a really good pedigree to have.
PAULA: So there you go.
PAULA: You’ve got a very good pedigree in my humble opinion.
MITCH KENNEDY: I was due because prior to Dell, my pedigree was a bunch of companies no one had ever heard of.
MITCH KENNEDY: So one of the interesting things at Dell is, Dell has an internship program where we do both undergraduate and graduate interns.
MITCH KENNEDY: And so we’ll bring in really smart people coming out of college.
MITCH KENNEDY: Very, very smart people.
MITCH KENNEDY: And they will be assigned a project.
MITCH KENNEDY: And then they will have to have like five or six weeks to do this project.
MITCH KENNEDY: And then they present it to senior managers, senior executives.
MITCH KENNEDY: I had a, it’s an amazingly valued group at Dell.
MITCH KENNEDY: And it’s this amazing source of innovation because they’re giving really wide leeway to redefine their problems, their questions, do all this research.
MITCH KENNEDY: There’s an expectation.
MITCH KENNEDY: The one time I’ve been in trouble at Dell is because no one explained to me how important the internship program was.
MITCH KENNEDY: And I was really busy and this intern was like, hey, I need this data.
MITCH KENNEDY: I’m like, oh my gosh, it would take me a day.
MITCH KENNEDY: I’m like, no, I don’t have time to do that.
MITCH KENNEDY: I’m sorry.
MITCH KENNEDY: And I moved on with my life.
MITCH KENNEDY: Only the weight of the world fell on me.
MITCH KENNEDY: And I was like, oh my gosh, is this like Michael Dell’s son or something?
MITCH KENNEDY: I don’t understand.
PAULA: Personal project.
PAULA: Yeah.
MITCH KENNEDY: Yeah.
MITCH KENNEDY: And they’re like, no, no, no.
MITCH KENNEDY: Someone had to pull me aside and go, no, no, no, it’s the intern.
MITCH KENNEDY: The internship program is incredibly valuable at Dell.
MITCH KENNEDY: And they use it as a way of fostering innovation and identifying talent.
MITCH KENNEDY: But I totally restructured the Consumer Loyalty Program in the US based on an intern project.
PAULA: My goodness.
MITCH KENNEDY: And he was absolutely right.
PAULA: Yeah.
MITCH KENNEDY: I mean, it was astounding to me how right he was.
MITCH KENNEDY: But that’s one of the things I like about Dell is that it values people at all.
MITCH KENNEDY: The organization values people at all levels.
MITCH KENNEDY: And so, you get a lot of talent because even if you are a fairly junior person, your point of view is for the most part, heard more than I would have expected.
MITCH KENNEDY: And so, you see some dramatic changes coming from some interesting places.
PAULA: Quoters.
MITCH KENNEDY: Yeah.
MITCH KENNEDY: And that makes for a, I think, a much more dynamic place to work.
MITCH KENNEDY: I think you get more innovation.
MITCH KENNEDY: And, and you can recruit better talent.
PAULA: Yeah.
PAULA: And as you said earlier as well, Mitch, in fact, like we’re all so busy doing our day jobs that we just don’t have the time to necessarily be creative and innovative.
PAULA: So you kind of need to be challenged externally.
PAULA: And whether that’s the intern or the guys in Epsilon, I know you lean on them as well.
PAULA: So it really is important just to have people that you can kind of go, give me an idea here because, you know, I need something new.
MITCH KENNEDY: Yeah, we have a couple of interns doing a project this summer, and it touches one part of the loyalty program.
MITCH KENNEDY: And they were kind of careful in their initial conversation with me.
MITCH KENNEDY: I think they were worried about stepping on my toes.
MITCH KENNEDY: And I’m like, listen, I’m praying for the, you guys are two geniuses because it doesn’t matter.
MITCH KENNEDY: You have to understand, it doesn’t, if you come up with something amazing that I’ve never thought of, that’s a win for me.
MITCH KENNEDY: I don’t, who has the idea, it means nothing to me.
MITCH KENNEDY: And I’m like, besides, I’m just going to steal it anyway.
MITCH KENNEDY: Don’t worry about it.
MITCH KENNEDY: But no, it’s interesting, you know, I mean, they are all over the loyalty program, talking to a lot of the same people.
MITCH KENNEDY: And Dell is a huge organization.
MITCH KENNEDY: Sometimes the hardest thing at Dell is just knowing who to, like, I can remember one time we had a problem with the flow of points and it was some decision made somewhere in IT.
MITCH KENNEDY: And the hardest thing was finding out who made it.
MITCH KENNEDY: I mean, Dell’s IT is 15,000 people and at times the biggest challenge is just knowing who to talk to.
PAULA: Yeah.
PAULA: But what I’m hearing, though, is that loyalty is very well respected in Dell, am I right?
MITCH KENNEDY: Yes, it is.
MITCH KENNEDY: It’s getting even more so.
MITCH KENNEDY: I think people are seeing the value of loyalty outcome.
PAULA: Okay.
MITCH KENNEDY: And I’m a big believer in that.
MITCH KENNEDY: My objective is our loyalty outcomes, whether that comes as the result of a structured program or something a little less fenced in is a different question.
MITCH KENNEDY: But without question and even more so moving forward, Dell values loyalty.
MITCH KENNEDY: For all the obvious reasons, right?
MITCH KENNEDY: It’s incredibly expensive to get a new customer, all that kind of stuff.
MITCH KENNEDY: But it’s taken a little bit.
PAULA: But it’s also expensive to run a loyalty program.
PAULA: So I think that’s where the internal justification isn’t always.
PAULA: And I heard you hesitate there, Mitch.
PAULA: And I hear that that’s what’s happening is that there’s an amazing awareness of the outcomes being attributable to the work that’s being done.
PAULA: And that does take time.
PAULA: Yeah, it’s a credit to you and it’s a credit to them, like, you know, and hopeful for the future for all of us.
MITCH KENNEDY: We’ve had to use…
MITCH KENNEDY: I started, when I took over the program in the US., I started reporting out grudgingly at first, to be honest with you.
MITCH KENNEDY: It wasn’t part of my master plan to solve this problem.
MITCH KENNEDY: I just, finance put the thumb on me and said, hey, we need to see these numbers weekly.
MITCH KENNEDY: And I was like, oh my gosh.
MITCH KENNEDY: I do not want to have conversations about weekly changes and redemption rates and all that kind of stuff.
MITCH KENNEDY: Like it doesn’t…
PAULA: It’s complex.
MITCH KENNEDY: Yeah, it’s so overly complex.
MITCH KENNEDY: And anyone who’s run a large points-based system of those conversations, someone will make a statement and you’re like, they’re like, is that true?
MITCH KENNEDY: Like, hmm, ish.
MITCH KENNEDY: Yeah, kind of.
MITCH KENNEDY: It’s like, kind of true.
MITCH KENNEDY: But what we’ve done is sort of report out, with Epsilon’s help, they’ve helped us sort of clean up the views of the program and get a more refined look at the flow of points and tie the flow of points to outcomes.
PAULA: Amazing.
MITCH KENNEDY: And that’s helped us and to get the business to take a step back, because one of the challenges I think what we all have is that the benefits of a loyalty program play out over time.
MITCH KENNEDY: And that time is rarely consistent with how the larger business views its own performance.
MITCH KENNEDY: And so they’re saying they’re asking you for performance metrics within a time period where you’re like, it doesn’t.
MITCH KENNEDY: Yeah, like without going into great detail, if for our current loyalty program, if we look at an active buyer, we’re not driving the biggest value of the program is not that driving value in an active buyer.
MITCH KENNEDY: I’m keeping the active buyer for a far longer period of time.
MITCH KENNEDY: And so the same value over a short period of time is experienced over that same increment many times over that of a non-member.
MITCH KENNEDY: And it took a little bit to sort of educate the business that that’s the form, the value you would take.
MITCH KENNEDY: And to do that in a way that was simple enough.
MITCH KENNEDY: I mean, if you talk to someone who’s senior, you have no time.
MITCH KENNEDY: You have…
PAULA: Exactly.
MITCH KENNEDY: I always say it’s like the big red crayon, right?
MITCH KENNEDY: You have to communicate concepts with the big red crayon.
MITCH KENNEDY: Now, Dell has incredibly smart people.
MITCH KENNEDY: So, it’s interesting.
MITCH KENNEDY: You’ll do…
MITCH KENNEDY: You’ll report out something or you’ll present to somebody very, very senior at Dell.
MITCH KENNEDY: And you will have one or two slides and then 50 backups based on how you answer their questions.
MITCH KENNEDY: And you better know your numbers because they…
MITCH KENNEDY: I always laugh.
MITCH KENNEDY: I mean, they can sense fear and weakness, right?
MITCH KENNEDY: Like if you have one number you’re a little squishy on, don’t put it in there because you’ll find yourself in a long drawn out conversation about the one number you didn’t want to buy.
MITCH KENNEDY: And so it’s funny, you know, the loyalty of Dell is going to be an ever more expansive part of the business.
MITCH KENNEDY: And I’m excited to see the form that that takes.
MITCH KENNEDY: And we’re still early in the process.
MITCH KENNEDY: We’re defining what that is going to look like.
MITCH KENNEDY: But what I’m excited about is organizationally, we are dealing with all the things that we want to deal with.
MITCH KENNEDY: How do we deal with the data that’s…
MITCH KENNEDY: Loyalty programs throw off a ton of data.
MITCH KENNEDY: How do we make certain storing off the right data?
MITCH KENNEDY: And how are we managing that?
MITCH KENNEDY: How are we using this to shape the customer experience across the entire breadth of the business?
MITCH KENNEDY: And then you have to understand with Dell, we are global.
MITCH KENNEDY: And we deal with everyone buying a tablet for streaming movies at home to a federal government buying mainframe computers, right?
MITCH KENNEDY: We were so broad.
PAULA: It’s extraordinary.
MITCH KENNEDY: Yeah.
MITCH KENNEDY: And so we have to have a system that is incredibly fluid, that has sort of a rigid sort of exoskeleton.
MITCH KENNEDY: And then all of this flexibility on the inside that allows us to localize by region and by customer group and all of that.
MITCH KENNEDY: Because just the margin rate between a consumer and you mean like it’s not even the same world.
MITCH KENNEDY: And yet we still have customers that sort of migrate up through that.
MITCH KENNEDY: Now we don’t have consumers all of a sudden owning a banana Republican there.
MITCH KENNEDY: But they migrate up into SB and all of that.
PAULA: But I can just imagine the complexity, actually, of sourcing the platform originally, like when you did go and start working with Epsilon.
PAULA: Like how can you even foresee the requirements for a company like Dell?
PAULA: I mean, that’s the extraordinary part in my mind.
MITCH KENNEDY: In looking at the new structure, I mean, I’m a big believer because I’ve been on the other side of that conversation as well.
MITCH KENNEDY: I’m pretty confident if I go to Epsilon and I say, listen, I come up with the craziest thing you could possibly think of.
MITCH KENNEDY: Can you do that?
MITCH KENNEDY: The answer is not a question of yes or no.
MITCH KENNEDY: It’s a question of how big the check guy is that I have to write.
MITCH KENNEDY: And then that’s what I want.
MITCH KENNEDY: I mean, let’s start with that’s what I want.
MITCH KENNEDY: Epsilon has been a great help in that they are a good sounding board for sort of directions we need to take.
MITCH KENNEDY: Anything you do in the modern world obviously rides on a support system of technology.
MITCH KENNEDY: And so I needed a partner that would work with us, that’s the flexibility to sort of step back at times.
MITCH KENNEDY: And they’ve been good at that and saying, listen, let’s, I don’t care what your system does currently.
MITCH KENNEDY: I don’t care what we are doing currently.
MITCH KENNEDY: This is the problem I’m trying to solve.
MITCH KENNEDY: Let’s find a way to do that.
MITCH KENNEDY: And they’re very good at stepping back.
MITCH KENNEDY: And then once we identify that, then trying to apply their technology to that solution.
MITCH KENNEDY: And at times we’ll adjust sort of how we’re going to go do something based on what’s more easily done.
MITCH KENNEDY: But I’ve found that that’s the best way to be innovative, right?
MITCH KENNEDY: Like, don’t worry about all the constraints.
MITCH KENNEDY: Find the solution and then apply the resources to it.
PAULA: Amazing.
PAULA: Amazing.
PAULA: Mitch, the last thing I wanted to ask you about is really just, I suppose, more on the education side.
PAULA: I know you confess to being an avid reader slash cigar smoker.
MITCH KENNEDY: Yes.
PAULA: I’m not sure which we want to highlight.
MITCH KENNEDY: Yeah, which is causal and which is…
PAULA: Exactly.
PAULA: But clearly, you’re very well read.
PAULA: Clearly, you have a real passion for loyalty.
PAULA: I’m sure you have great fun in the office.
PAULA: And I’m sure there is plenty of stress along the way.
PAULA: But just in terms of, again, listeners, you know, if they’re looking to grow their knowledge about loyalty, what would you suggest they be doing in terms of educating themselves?
MITCH KENNEDY: It’s funny, you know, I’m a huge believer in the psychology behind rewards.
MITCH KENNEDY: I believe if you understand that, then you can sort of innovate based on foundational truths that remain unchanged over time.
MITCH KENNEDY: One of the hard things about how people interact with rewards, well, two things.
MITCH KENNEDY: One, the minute you insert any rewards into any system, you’ve changed it.
PAULA: Yeah.
MITCH KENNEDY: And so you have to sort of have some awareness of to what impact that’s going to have.
MITCH KENNEDY: The second is, people are full of crap, right?
MITCH KENNEDY: Like if I ask you what you want, what you tell me is not what actually drives your behavior.
MITCH KENNEDY: And so too often, like I’ll have people in the organization come to me and they say, hey, I want to do this.
MITCH KENNEDY: I want to pay out rewards to do this and for this behavior to get this outcome.
MITCH KENNEDY: And I’m like, it’s not going to have any impact.
MITCH KENNEDY: It’s not going to do what you think it’s going to do.
MITCH KENNEDY: There’s either unintended consequences or that’s just not how it works.
PAULA: Yeah.
MITCH KENNEDY: And so I would strongly advocate, like one of the first books I read is a book called Drive.
PAULA: Okay.
MITCH KENNEDY: And it talks in there about cash based system.
MITCH KENNEDY: And it’s, there’s, it was just the first one I read.
MITCH KENNEDY: And so it’s kind of a positive place in my heart from it.
MITCH KENNEDY: And I’m, I read, I skim fast.
MITCH KENNEDY: Like if I’m reading something and I go, I don’t care, I move on, you know, I’ll blow right through.
MITCH KENNEDY: I don’t like try to get weighted down in some esoteric discussion of something that I know I’ll never use.
MITCH KENNEDY: And so I will go through books fairly quickly.
MITCH KENNEDY: But for me anyway, my journey started with the book Drive by Daniel Pink.
MITCH KENNEDY: There was this, it was going to sound really interesting, but there was one study in there and I don’t know why, it just even all these years later, just so resonates with me, but they went to a preschool and they had, they measured how many pictures kids were drawing.
MITCH KENNEDY: You know, they put out on a table, paper and crayons, and then just count how many pictures people draw.
MITCH KENNEDY: And they divided the kids into two groups, and one group got a cookie or something for every picture they drew, and the other one got nothing.
MITCH KENNEDY: And the group that got nothing continued on at the same rate.
MITCH KENNEDY: And the one that got a cookie drew more pictures in the short term.
MITCH KENNEDY: And then eventually it took two cookies to get them to draw more pictures.
MITCH KENNEDY: And if you took away the cookies, they didn’t draw any pictures.
PAULA: Oh my goodness.
MITCH KENNEDY: And I’ve used that.
MITCH KENNEDY: It sounds crazy.
MITCH KENNEDY: But there’s a foundational truth there.
MITCH KENNEDY: And it’s absolutely accurate in my experience.
MITCH KENNEDY: And so I’ve had that conversation where for a part of the business, they said, hey, we want to, you know, for budgetary reasons, we don’t want to pay rewards on this anymore.
MITCH KENNEDY: I’m like, okay, that’s fine.
MITCH KENNEDY: But please understand, you aren’t going to go back to the baseline.
MITCH KENNEDY: You’re going to go below the baseline.
MITCH KENNEDY: That’s what happens when you start paying a reward out on something.
MITCH KENNEDY: And I use that explanation when people want to start paying rewards out, transaction rewards out on something new.
MITCH KENNEDY: Listen, that’s great.
MITCH KENNEDY: We can do that.
MITCH KENNEDY: You will get more of it.
MITCH KENNEDY: But please understand, there is a predictable cycle to this.
PAULA: Yeah.
MITCH KENNEDY: And it holds true anytime you release rewards out into that.
MITCH KENNEDY: If anybody has, anybody listening has a book or any content like that, please let me know.
MITCH KENNEDY: Paula has sent me some stuff and I’ve started to devour it.
PAULA: Wonderful.
MITCH KENNEDY: It’s actually hard.
MITCH KENNEDY: I just spent a week off and I had made myself read something else.
MITCH KENNEDY: But there’s so much great work out there and I find it just endlessly fascinating.
PAULA: For sure.
PAULA: Actually, Mitch, have you heard of a gentleman by the name of Yu-Kai Chou from Stanford University?
PAULA: He lectures in gamification there.
MITCH KENNEDY: No.
PAULA: Okay.
PAULA: So I am going to make your day, hopefully.
PAULA: But yeah, he’s…
MITCH KENNEDY: I’m writing it down as we speak.
PAULA: Exactly.
PAULA: Now, and I won’t do…
PAULA: Oh, I know what he calls it, the octalysis framework.
PAULA: He has literally captured what you’ve been describing, Mitch, in terms of the drivers of human psychology and human behavior.
PAULA: And I totally agree with your point.
PAULA: If I was to go back and redo my career, I’d probably start with a degree in psychology.
PAULA: And in fact, I might do one at some other point.
PAULA: I just think it’s so fascinating.
MITCH KENNEDY: I’m the same way, I’m the same way.
MITCH KENNEDY: If I could go back in time, it would be behavioral psychology and economics.
PAULA: Perfect.
MITCH KENNEDY: To me, because the interplay between, we all want to be rational.
PAULA: Yes.
MITCH KENNEDY: But we’re not.
PAULA: Yeah.
PAULA: We’re totally not.
PAULA: No, no.
MITCH KENNEDY: And so I love the fact that if I ask a group of people a question, the answer I get is what they wish to be true rather than what’s actually true.
PAULA: They don’t have, none of us have a clue actually.
PAULA: It’s not them, it’s us.
PAULA: Yeah.
PAULA: You’re totally wrong.
MITCH KENNEDY: No, no, exactly.
MITCH KENNEDY: I’m not, I’m, please understand, I am no better.
PAULA: I am an irrational human being.
MITCH KENNEDY: Right.
MITCH KENNEDY: I like to think I’m self-aware, but the reality is, no.
PAULA: No, no.
PAULA: Brilliant.
PAULA: So I will link to that one I’ve remembered.
PAULA: It’s called Actionable Gamification.
PAULA: So I’ll make sure to link to that in the show notes and the book that you mentioned also, Drive, as well.
PAULA: Mitch, I’ll definitely link to that.
PAULA: I don’t have any more questions from my side.
PAULA: I have loved hearing about all of your work in Dell and your career and your insights.
PAULA: Is there anything else you wanted to mention, Mitch, before we wrap up?
MITCH KENNEDY: No, other than, like I said, if anyone has any content out there, please.
PAULA: Okay.
PAULA: Send it over.
MITCH KENNEDY: Send it over.
MITCH KENNEDY: I would love to see it.
PAULA: Okay.
PAULA: Brilliant.
PAULA: Well, listen, obviously, I’ll make sure to link to your LinkedIn profile as well, Mitch, just to make sure that people can connect with you, because I do believe in the power of sharing.
PAULA: So you’re absolutely right.
PAULA: The resources, we all need to recommend them to each other.
PAULA: So listen, without further ado, I know you have a busy week to get back to.
PAULA: So Mitch Kennedy from Dell Loyalty, thank you so much from Let’s Talk Loyalty.
PAULA: This show is sponsored by Wise Marketeer Group, operating the Wise Marketeer and Loyalty Academy.
PAULA: For nearly 25 years, the Wise Marketer is the industry’s longest serving publication and source for news, information and insights, which now includes its own branded industry research, insights and advice.
PAULA: For global coverage of customer engagement and loyalty, check out thewisemarketer.com and become a Wiser Marketer member or subscriber.
PAULA: The Loyalty Academy sets a global industry standard for loyalty education, with its Certified Loyalty Marketing Professional or CLMP designation, which has created a community of more than 1200 marketing executives and professionals across more than 50 countries.
PAULA: Learn more about global loyalty education for individuals or corporate training at loyaltyacademy.org.
PAULA: Thank you so much for listening to this episode of Let’s Talk Loyalty.
PAULA: If you’d like us to send you the latest shows each week, simply sign up for the Let’s Talk Loyalty newsletter on letstalkloyalty.com.
PAULA: And we’ll send our best episodes straight to your inbox.
PAULA: And don’t forget that you can follow Let’s Talk Loyalty on any of your favorite podcast platforms.
PAULA: And, of course, we’d love for you to share your feedback and reviews.
PAULA: Thanks again for supporting the show.