Paula: Welcome to Let’s Talk Loyalty, an industry podcast for Loyalty Marketing Professionals.
Paula: 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.
Paula: You.
Paula: So today’s show is brought to you by Epsilon and their People Cloud Loyalty Solution, which is a powerful platform that boasts over 50 years converting casual customers into lifetime fans.
Paula: Epsilon’s technology and services operate at the core of the publicist group worldwide, powering brands such as Dell, Dunkin, Gap and Walgreens.
Paula: And their platform is designed to give all of their clients the power and flexibility to create one of a kind emotional connections with their customers.
Paula: Epsilon’s People Cloud Loyalty is a market leading end-to-end solution and it is in fact the only company that has been named a leader in both the loyalty technology platforms and the loyalty services providers Forrester Waves in 2019.
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Paula: That website again is emea.epsilon.com forward slash let’s talk loyalty.
Paula: Now let’s get on with the interview.
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, 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: Thanks for the invite.
Mitch: I appreciate it.
Paula: Great to have you here, Mitch.
Paula: 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: Yeah, you know, it’s the adjustment coming back from having taken a week off.
Mitch: 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.
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 Programme.
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: You know, it’s funny, and this is an old statistic and it’s not one of like sort of earth shattering inside a revelation.
Mitch: But I always come back to the idea.
Mitch: 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: 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: And I always have to sort of use that statistic.
Mitch: It’s like the one that I throw out all the time to say, listen, membership isn’t a KPI.
Mitch: I don’t really care how big the program is.
Mitch: That doesn’t speak to efficacy.
Mitch: I could streamline membership if you, if you want to pay me a bonus on how many members I have, I’ll be a rich man.
Mitch: I can make that work.
Mitch: 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, but certainly, you know, 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: I always think it’s interesting too.
Mitch: And I’m curious if you and the people listening are the same way.
Mitch: When you’re in a store and they ask you, do you want to join the loyalty program?
Paula: Yeah.
Mitch: Someone who actually manages loyalty programs.
Paula: Yeah.
Mitch: If I sign up, it’s out of curiosity, 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.
Paula: So whether they’ve trained their staff.
Paula: So, 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: Yeah, exactly.
Mitch: I was at a store yesterday, actually.
Mitch: 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: And the person checking me out told me to click no.
Paula: What?
Mitch: Yeah, they just said, oh, you know, cause you go through the screens.
Paula: The hassle.
Mitch: Yeah, and then the person was like, check no.
Mitch: Yeah, exactly.
Mitch: You guys have gotten off the rail somewhere here.
Mitch: I don’t think that was the preferred customer experience.
Paula: No, no, my God, that’s hilarious.
Paula: Well, hopefully nobody does that with the Dell Programme.
Mitch: Yeah, 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, but at the end of that, that trail is going to be an employee that probably doesn’t care all that much.
Mitch: 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 programme 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 and the Advantage Programme.
Paula: I didn’t know a lot about actually, it’s not a programme 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 programme in the US, Canada, I think Brazil and lots of other countries around the world.
Paula: So tell us exactly about the programme.
Mitch: Well, it does, from a loyalty perspective, Dell is sort of a unique entity in that we have a really kind of long purchase cycle.
Mitch: And so the Dell Advantage Programme, it has evolved quite a bit over the last number of years, and it’s about to evolve a great deal more.
Mitch: As it’s currently constructed, it’s basically a transactional rewards programme.
Mitch: We pay out transactional rewards at sets amounts based on revenue generated from select customer groups.
Mitch: The outcome of that, the objectives as currently constructed are pretty straightforward.
Mitch: We’re looking to drive transaction velocity, maintain some level of engagement in between large purchases and get loyalty outcomes basically out of that very narrow defined programme benefit.
Mitch: We’re evolving that to a much more nuanced, much more expanded programme that’s more focused on the customer experience.
Mitch: But as currently constructed, it’s a very transactional programme.
Mitch: Now to be fair, it does that effectively, right?
Mitch: I’m not discounting the impact of that, but realistically right now, as we’re currently constructed, we’re buying transactions.
Mitch: We’re doing that thoughtfully and selectively, but at the end of the day, that’s what we’re doing.
Paula: Okay, and it is a consumer programme and a small business programme, am I right?
Mitch: Correct.
Mitch: Correct.
Mitch: Currently active in US, Canada, Brazil, UK.
Paula: Okay, fantastic.
Mitch: We have some mini programmes 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, wow.
Paula: Okay, 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 programmes, they have a logic, they have a function, they definitely drive some behaviour.
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: Very early stages, but we have a sort of organizational commitment to walk that path.
Mitch: 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.
Mitch: You’re committing to some level of pain in the short term to make that level of change.
Mitch: And one of the things I like about Dell is, organizationally, I’ve seen a lot of courage.
Mitch: 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: And what I’ve been pleasantly surprised by was is Dell’s sort of willingness to take a unique look at something.
Mitch: I mean, to sit in a meeting 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: What is the right question?
Mitch: And to me, that’s where innovation comes from, is the ability to step back and redefine the question.
Mitch: And Dell has an organizational willingness to do that that I found very surprising.
Mitch: And that, for me, that makes it very exciting because I can be innovative at scale.
Mitch: Although I was laughing the other day, I said, when I sold Dell on the idea of making some pretty dramatic changes, you know, it’s having a point of view is all well and good until a hundred billion dollar company goes, okay, let’s do it.
Mitch: And then you’re like, whoa, whoa, whoa, I thought we were just two guys talking here.
Mitch: I’m not willing to go that far.
Mitch: I mean, I’m not saying I’m right.
Mitch: I just, but it’s, so it’s exciting times.
Mitch: We’re in the process of sort of re-imagining ourselves.
Paula: But it takes a lot of courage as well for you Mitch, even to take that approach, because as you said, you know, the whole thing, you know, it can go, you know, 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: Yeah, you know, my wife had argued that I’m often wrong, but never uncertain.
Mitch: And so, yeah, I have a willingness to say, actually, you know, it’s funny.
Mitch: 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.
Mitch: And so there’s a lot of knowledge, there’s a great deal of a knowledge base out there that you can tap into.
Mitch: 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: Some of that comes from an entrepreneurial background, to get clients, basically, you had to be willing to propose a course of action that wasn’t apples to apples.
Mitch: I always laughed.
Mitch: No one got fired for hiring IBM.
Mitch: They hired Joe Blow and his merry band of consultants from some no-name agency.
Mitch: They could get fired.
Mitch: And so, yeah, that’s sort of where it came from.
Paula: And Dell hired Mitch Kennedy.
Paula: Well done, Dell.
Mitch: Yeah, it was funny.
Mitch: I started Dell and I was just doing analytics.
Mitch: And so it was sort of an interesting experience to sit down and my first day, they gave me all these dashboards.
Mitch: And it was very interesting in the end.
Mitch: I’m like, these aren’t the right questions.
Mitch: Like you’re not looking at the right data here.
Mitch: Like what are the objectives here?
Mitch: What are you trying to accomplish?
Mitch: And then let’s talk about whether there’s a path to get there.
Mitch: And so pretty quickly, I think, I sort of migrated out of that role.
Mitch: But yeah, it was interesting.
Mitch: 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, in terms of your career?
Mitch: Oh, yeah.
Mitch: Actually, it was interesting.
Mitch: My first foray into anything similar, close to loyalty, I had started a yield management company in the travel industry, specifically golf.
Mitch: But we envisioned ourselves as a software company.
Mitch: And we had to make a pretty rapid transition when we ran out of money.
Mitch: And we had the choice between having to go home and tell our wives that, hey, we want to make the house payment or find a new way to do this.
Mitch: And what we figured out was that no one really knew how to use this great software.
Mitch: And so we flipped it on its head and turned it into basically, we will use the software on your behalf.
Mitch: And as little as we knew, we seemed to know more than anybody else.
Mitch: And that was disturbing on one level and an opportunity on another.
Mitch: And so that’s sort of what opened it up, the sort of member-based efforts to drive loyalty outcomes.
Mitch: Yeah, how do I drive, and I didn’t recognize it as loyalty at the time.
Mitch: I just do now do looking back.
Mitch: How do I drive frequency?
Mitch: How do I drive sort of engagement with my clients and all that?
Paula: Wonderful, and 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: Yeah, you know, what was funny, we did, we were so wrong about so many things.
Mitch: And it was funny because you, there’s great outcomes in being wrong sometimes.
Mitch: What we found was that we could not get somebody to spend more money on golf.
Mitch: We could just shape where they spent it.
Paula: Okay.
Mitch: And I can remember talking to, I’m the one that did all the business development.
Mitch: And so I remember talking to a guy and he was like, oh my gosh, that’s extortion.
Mitch: And I was like, no, I know it’s not.
Mitch: And then I remember getting in my car going, kind of.
Mitch: I mean, like who owns the customer owns a great deal.
Mitch: And by applying sort of best practices from a loyalty and engagement perspective, you own the customer.
Paula: Yeah, exactly.
Mitch: And that was sort of the objective.
Mitch: And I kind of opened my eyes to that.
Mitch: And then once I moved from there, I started seeing.
Mitch: And then I started getting some exposure to point based systems.
Mitch: And then that sort of opened up gamification and some other things, because it’s very easy in a point based system to get off track.
Paula: Sure.
Paula: Oh, of course.
Paula: Absolutely.
Mitch: And I always say in loyalty, it’s very easy to change.
Mitch: It’s just very hard to change back.
Mitch: So you’ve got to be really careful.
Mitch: People go, how hard would it be to do whatever?
Mitch: It’s not a problem at all.
Mitch: It’s very hard to get out of that if we’re wrong.
Mitch: 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.
Paula: You know, I mean, what tempted you there and how does it compare?
Mitch: You know, it’s funny, I took the job to be Frank Adell.
Mitch: I didn’t, it was a test.
Mitch: I just wanted to see what it was like.
Mitch: And I found out that I really liked it.
Mitch: At the time, I just, I needed something.
Mitch: I needed a break from doing the entrepreneurial bit.
Mitch: Yeah, you know, having, 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.
Mitch: 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 her daughter was going off to college.
Mitch: And the weight of that was just so great.
Mitch: I don’t, if you’ve never been in that position, you may not realize just how all encompassing that is.
Mitch: But I remember being on the plane thinking, if I can’t deal with this problem successfully, I’m gonna have to let some people go.
Mitch: I mean, yes, it’s gonna impact the finances of my family, but it’s going to impact more than, I mean, even more than that.
Mitch: And so that was an experience.
Mitch: And to be honest with you, I needed a little bit of a break.
Paula: Sure.
Mitch: I remember when I started Dell coming out of a meeting and someone saying, oh, boy, that was stressful.
Mitch: You’re never used to that.
Mitch: It was like, oh my gosh, that was war with Nerf guns.
Mitch: It’s like, there’s no stress there.
Mitch: Like no one’s losing their job.
Mitch: 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.
Paula: Yeah.
Mitch: I can’t keep you, you know what I mean?
Mitch: Like, nah.
Paula: It’s a whole different discussion.
Mitch: Yeah, it is totally different.
Mitch: And solving problems with almost no resources.
Mitch: Like, the first loyalty platform I put together, it was like, gamification is the best example.
Paula: Okay.
Mitch: Someone was saying, well, how do we know this works?
Mitch: 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: And so, you know, the psychology behind it is strong, I promise you, because what I had lacked, nuance.
Mitch: You know what I mean?
Mitch: 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 Programme.
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: Yeah, you know, it’s funny.
Mitch: Gamification for me is, it does a couple things amazingly well.
Mitch: By leveraging gamification, you can get members to engage in content more frequently and more deeply than they would otherwise and you can create a varied reward structure.
Mitch: 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.
Mitch: By making it variable, you can extend that.
Mitch: 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 some would go back into it.
Mitch: But they had released a cash-based reward into a point system, and they needed some way to lower the cost of points issued and redeemed.
Mitch: And like I said before, you can’t put an Amazon card in there and go, oh, gosh, we shouldn’t have done that.
Mitch: We’re going to take it back.
Mitch: Yeah, members tend to frown on that, and they express that by going elsewhere.
Mitch: And so I needed a way to relieve that pressure.
Mitch: And so I made a number of changes.
Mitch: But one of the things I did is I actually released entries to games of chance as a redeemable reward option.
Paula: Nice.
Mitch: And so people were redeeming $2 and $3 worth of points for something that costs $0.10, $0.08.
Mitch: And I had done a bunch of research before doing it, because I didn’t know it.
Mitch: To be frank, I didn’t know anything about it.
Mitch: I had the idea sitting on a plane.
Mitch: And so when I got to my hotel that night, I started doing all this research.
Mitch: And there’s a great deal of research out there.
Mitch: And I found this fantastic dissertation written by, and I’ve always laughed because it’s a dissertation written by a PhD student in behavioral psychology.
Mitch: And I based massive program changes on this dissertation.
Mitch: And I remember as I was doing it thinking, I don’t know what grade she got.
Mitch: Her professors may have gone, yeah, this isn’t even close to being true.
Mitch: And yet I was basing all of this stuff on.
Mitch: But it was just such a compelling, she cited all this research going back generations.
Mitch: And I can say that reservation has proven to be completely true.
Mitch: The idea behind it was basically this concept of preference reversals.
Mitch: 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 which is the better game.
Mitch: They will say the one with the best odds of winning.
Mitch: 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: And I found that to be amazingly true, to the point where the odds of winning are meaningless.
Mitch: Beyond a willingness to look at yourself in the mirror the next day.
Mitch: And so it allowed me a great deal of flexibility in controlling the 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: And what was interesting is that the psychology behind it is so great.
Mitch: And I’m a big believer in that having people lose isn’t a bad thing.
Mitch: Yeah, but a lot of people will have, if you talk to people about a game of chance, they have a heart attack.
Mitch: Well, oh my gosh.
Mitch: What about the people who lose?
Mitch: Are they going to be mad?
Mitch: No.
Paula: They’ve had an experience.
Mitch: Exactly.
Mitch: Exactly.
Mitch: And so the difference for me is it’s that engagement, it’s that sort of interacting with that content that allows them to be more fully engaged in what’s there.
Mitch: If you send an email out with content, we all do it, right?
Mitch: It’s the subject line and maybe, and I mean, the first to say I’m a bit cynical on a lot of this, largely because it’s not my area of expertise and therefore.
Mitch: 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, gauge the content and answer questions about program terms and conditions on the backside.
Mitch: They would never have done that.
Mitch: If I’d sent that in an email, people would have thought I was crazy.
Mitch: But in the game, no one even, and my reward mix was, I mean, it was so small.
Mitch: But it doesn’t matter.
Mitch: People engaged it and they were 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: What’s interesting to me is it’s definitely about the instant gratification.
Mitch: Like, if you look at it 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: For those of you who aren’t gamblers, you drop the ball and it lands on number.
Mitch: It’s like you walked up to roulette table and you said, listen, here’s $100.
Mitch: Put it on red.
Mitch: And then you went up to your room, and you may or may not have won.
Mitch: And if you didn’t, no one will ever talk to you again.
Mitch: You’ll never hear about it.
Mitch: Not a very engaging game and not one you’re going to play very frequently.
Mitch: It’s the difference between that and them spinning the wheel.
Mitch: You watch the ball drop and see whether you won right there.
Mitch: If that’s the case, you’re more willing to do that over and over and over again.
Mitch: One of the things that stunned me about gamification is that people will engage it over and over again.
Mitch: I’ll never forget we had one person redeem $3 worth of points to play one of the games 67 times in a month.
Mitch: Exactly.
Mitch: My first thought was, oh my gosh, we had a technical issue and we just drained points out of this poor guy’s account.
Mitch: My dad, no, there was no technical issue.
Mitch: This guy did it willingly.
Mitch: I’m like, okay, well, then let’s call this guy and figure out sort of what’s the…
Mitch: No, he’s totally fine with the experience.
Mitch: The interesting thing is for $3, he could have redeemed for most of the prizes in the game.
Mitch: Anyway, that kind of keyed me into sort of how strong the psychology is on that.
Mitch: It just allows me to sort of breadcrumb behavior through a larger ecosystem because my cost per…
Mitch: 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: And so it allows me to solve problems at scale, move members through sort of 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: It’s fantastic for training.
Mitch: But to be clear, it is a tool in a larger program as opposed to a program in and of itself.
Paula: Sure.
Mitch: You know what I mean?
Mitch: Like you can overdo it, you can take it too far, it can become too frequent.
Mitch: The psychology behind it, it’s a bit binary in that, in my experience, for those it engages, oh my gosh, it can engage them to a frightening degree.
Mitch: For some people, it doesn’t really resonate with them.
Mitch: So you have to be a little careful.
Mitch: Anyway, 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: Yeah.
Mitch: Yeah.
Mitch: 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: 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.
Mitch: And if you walk into a casino in the world, you see a pretty broad based cross-section across ethnicity, gender, everything.
Mitch: 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: It’s funny too because I’m a huge proponent of gamification and I’m not someone who gambles.
Mitch: I was in Vegas.
Mitch: 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: And I remember I was just walking up to my room and I don’t normally carry cash, but I had 20 bucks.
Mitch: I stopped at a blackjack table, played like four or five dollar hands or something, lost my money in about 30 seconds.
Mitch: And I remember getting in the elevator going, that was so unfulfilling.
Paula: Exactly.
Paula: Yeah, exactly.
Mitch: Like that did absolutely nothing for me.
Mitch: I could have, yeah, I 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 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 programme.
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: Well, and also too, I think that that’s absolutely true.
Mitch: But also too, we live it, 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: And so we can identify non-transactional behaviors that are incredibly valuable, incredible indicators of potential value or drivers of member value, that are too far removed from the transaction to directly reward at a level that would actually drive the behavior and gamification allows you to lean on that behavior in a way that’s economically viable.
Mitch: You know, if I know that you updated your profile within the first 30 days, for instance, of sign up, it makes you more likely to be engaged at a year.
Mitch: 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: But using gamification, I can sort of lead you through that and do that in a way that’s economically viable.
Paula: Okay, 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 that was really good fun.
Paula: And I like this brand more.
Paula: So there’s kind of a halo effect.
Paula: And you get the data that you need without any investment.
Mitch: Absolutely.
Mitch: And it’s funny.
Mitch: And that’s exactly the way I described it, too.
Mitch: There is a value exchange.
Mitch: And for people who don’t, they look at it and go, it’s just a silly little game.
Mitch: You have any idea how much time the average person spends on their phone doing some, there is a value to it.
Mitch: And if structured correctly.
Mitch: And so one of the things that I always do is I go through sort of a set when I’m working with stakeholders to build a game.
Mitch: Always starting with the objective because sometimes it’s just for it to be fun.
Mitch: We’ll do that in our gaming community, right?
Mitch: Some of the games are there’s no value to them other than it’s just sort of fun.
Mitch: And it’s a way for them to interact with a brand that’s positive.
Mitch: It’s not earth shattering when I cure cancer or selling computers, right?
Mitch: Like at the end of the day, sometimes just being fun is okay.
Mitch: And yeah, sometimes I want them to engage content sometimes, you know what I mean?
Mitch: But there is even for the losers, there’s a value exchange and we see an increase in positive outcomes even from those who lose.
Mitch: But oh my gosh, did I have to document that?
Paula: I’m sure.
Paula: Yeah.
Mitch: People were very, and I always say to you, if everybody wins, did anybody?
Mitch: Do you mean if I play a game and I won, but everyone else did as well?
Mitch: It’s not the same charge as if somebody lost.
Mitch: I mean, that sounds terrible.
Mitch: And you think, gosh, you know, are we really that bad?
Mitch: But yeah.
Paula: We’re a competitive species, Mitch, there is absolutely no doubt.
Mitch: Yeah.
Mitch: And, you know, it’s funny, one of the first books I read on gamification, they talked about sort of that competitive drive and they always talked about one of the things.
Mitch: 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, but I am avid.
Mitch: 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: I always thought that was somewhat interesting.
Mitch: But anyway, totally, totally off-topic, but yes, we’re all competitive.
Mitch: And so for it to be really effective, you need to have, in my opinion, you need to have losers.
Mitch: In my experience, I should say.
Mitch: And so there are times when I’ll set up a game and everybody wins.
Mitch: And then to be honest with you, my objective is to issue the rewards.
Mitch: I’m just layering in the game to get them to engage a little bit of content and to create some breakage, make them take a step towards me before I give them something in return.
Paula: Sure.
Mitch: But the reality is I’m not, my objective isn’t brand engagement.
Mitch: 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 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: And so that’s the one time I won’t have winners.
Mitch: Excuse me, I won’t have losers.
Paula: You won’t have losers.
Mitch: Yeah, but for the most part, I like having losers.
Paula: Yeah, no, I totally get it, Mitch, 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, 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: It is a way for you to, 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 and I’ll do it in a way that people will enjoy, 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: That’s the value exchange.
Mitch: And so that’s kind of how I sold it internally.
Mitch: And I walked people through sort of a waterfall.
Mitch: This is how many people would like send out an email, for instance, right?
Mitch: This is the waterfall.
Mitch: We’d expect this open rate, this game engagement rate we would expect.
Mitch: And it was very interesting, you know, to watch people sort of have their eyes open to sort of the possibilities.
Mitch: But even at that, they allowed me to test it.
Mitch: And that’s one of the things I like about Dell.
Mitch: So they’ll allow you to test it.
Mitch: And I’m a big believer in testing ideas and concepts.
Mitch: Because if, and I even say, listen, to be innovative, you have to be willing to fail.
Mitch: And so you need to structure tests in a way that give you a way to back out.
Mitch: And so when I first started testing gamification, I did it in our gaming community.
Mitch: Gamers are actually the worst audience for it.
Mitch: So it was not…
Paula: Interesting.
Mitch: Yeah, they’re not big game.
Mitch: Because they were like, hey, I did really well in this game.
Mitch: I don’t understand why I didn’t get more rewards.
Mitch: Like it’s just a game of chance.
Paula: They’re too well-educated.
Mitch: Oh, exactly.
Mitch: They had much higher expectations for the graphics for the game and everything.
Paula: Yeah.
Mitch: But I tested it in a way that I could back out of if I didn’t get the outcome I wanted.
Mitch: And so I just, I have slowly sort of pushed it out into more and more parts of the business.
Mitch: And as we sort of evolve the programme, it will play a larger role in how we collect data and how we, because one of the things to remember about gamification is it allows you to ask something in return for giving them a reward.
Mitch: I asked you to opt in, I asked you to answer a question.
Mitch: We all have marketing programmes based on predictive models.
Mitch: Those predictive models hinge on a handful of data points.
Mitch: This allows you to collect meaningful data at scale.
Mitch: The one challenge, the one pre-visa I would say, and this is just me.
Mitch: I hate when someone asks me for a data point and then they don’t use it.
Mitch: If you ask me for a data point, I want it to shape the customer experience.
Mitch: I want it to shape how the brand interacts with me.
Mitch: 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: Then the customer is like, well, I already told you that.
Paula: Exactly.
Paula: Yeah, you’re not listening.
Mitch: Exactly.
Mitch: Exactly.
Mitch: It allows you to…
Mitch: That’s one of the dangers of it is that you can collect more data than you can use.
Mitch: That’s easy.
Mitch: In today’s world, it’s much easier.
Mitch: We all, I think, probably know more about our customers than we can actually act on.
Paula: Absolutely.
Paula: Like I said earlier, actually, Mitch, 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, I’m also on my birthday, very challenging to the brands that I’m a member of their loyalty programme because I’m sitting waiting for something to happen.
Paula: Yeah, I know.
Mitch: And it usually doesn’t.
Mitch: It’s like, jeez, it’s my birthday.
Mitch: Now I get a little kiss on the cheek here?
Mitch: Come on.
Mitch: Yeah.
Mitch: Give me something.
Paula: Exactly.
Mitch: Yeah.
Mitch: You know, 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.
Mitch: I never thought of doing it this way.
Mitch: And yeah, it’s so I never have an organic reaction to anything.
Mitch: My reaction is always tend to like, will this make me look smarter if I could totally copy this?
Mitch: And I’m so willing to do that, by the way.
Paula: So oh, completely.
Mitch: Yeah, I’m there’s no none of us need to be the ones that solve all problems, right?
Mitch: 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.
Paula: 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, OK, maybe this isn’t my concept and whatever.
Paula: But now I’m like, no, copy with pride.
Paula: Out we go.
Paula: Here we go.
Mitch: Absolutely.
Mitch: It’s funny because I’ve gone through my career.
Mitch: I will ask somebody to send something to me and I will be completely transparent.
Mitch: Could you stand up to me?
Mitch: Because I’m going to totally plagiarize crap out of that.
Paula: Absolutely.
Mitch: I love that and I’m going to take it in.
Mitch: Yeah.
Mitch: 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: It’s totally changed how I think about transactional rewards.
Mitch: He was just like, it’s demand.
Mitch: I now envision transactional rewards as demand, but as a fluid that I can direct around an ecosystem so I can time when it gets to a certain point.
Mitch: I can time what points it touches and what point it doesn’t.
Mitch: 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.
Mitch: It’s now mine.
Paula: Yeah.
Mitch: Just FYI.
Mitch: I use it all the time.
Mitch: Five years from now, I can write a book and no one knew you existed.
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 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: I’m a huge believer in objectives and I started almost any discussion about loyalty with the objectives, right?
Mitch: Customer value and customer retention.
Mitch: And I get asked to do all of these things.
Mitch: I get asked, you know, when we have to report out outcomes, or someone tries to direct us in a certain area, I always come back to that, listen, I’m looking to drive long term value and retention.
Mitch: If what you’re asking me to do is outside of those, we can conceivably do that.
Mitch: But it’s not something that we’re currently pushing.
Mitch: And we get asked that we’re a large organization with a ton of teams.
Mitch: And so you’ll get someone that wants to know, like, what percentage of your members do what I, you know, something.
Mitch: And I always have to say, listen, that doesn’t dovetail with our objectives.
Mitch: It’s not something we’re trying to drive.
Mitch: So I can give you the number, but it’s just a number.
Mitch: It’ll go up or down based on things that are completely outside of the loyalty program.
Mitch: And I, when I first started Dell, it was interesting, you know, I had, 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: And I remember giving it to them and saying, listen, I don’t know you, but, but just take this piece of advice.
Mitch: You don’t control any of those numbers.
Mitch: So they’re good.
Mitch: Today, they’re good.
Mitch: They’re good because the organization as a whole is driving those numbers.
Paula: Okay.
Mitch: So do not claim these numbers, state them as numbers, because the business will shift.
Mitch: That number is going to go south and they’re going to go, hey, why, you know, what happened?
Mitch: What are you doing?
Mitch: And, and so that, you know, you have to be a little careful in a large, large organization in that, you know, the KPIs are strange.
Mitch: So I, we have a very small set of what I would call a KPI.
Mitch: And then we have a ton of metrics that we use as sort of performance measurements that give us insight into what’s happening, but they’re not a KPI.
Mitch: They’re just, it’s a number that tells us something about the program.
Paula: Or it’s time not to.
Mitch: Exactly.
Mitch: Exactly.
Mitch: And some of them are ones we don’t even control, but it’s just good to know.
Mitch: It gives you insight into what’s happening in the business as a whole.
Paula: Wow.
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: We have loyalty is, what to think here, five people.
Paula: My goodness.
Paula: That’s tiny.
Mitch: It’s tiny.
Mitch: I know.
Mitch: We met with another brand through Epsilon, and it was like a clown car.
Mitch: I mean, they just, the conference room door opened and they just, they kept coming in.
Mitch: I was like, oh my gosh, like, they’re so much bigger than ours.
Mitch: And 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: Okay.
Paula: Yeah.
Mitch: And then I need, you know, by the time he’s done, he’s like, wait, you’re doing all that?
Mitch: Yes.
Mitch: Like, of course, there’s, we have five employees.
Paula: Yes.
Mitch: I’m the one that’s going to do all of those things.
Mitch: And that, and Dell’s a little bit that way as well.
Mitch: We don’t have very many people watching it.
Mitch: Now, obviously we leverage a bunch of other teams and all of that.
Mitch: So if we need to do creative, we need to, but the actual loyalty team is, is, yeah, that’s five people.
Mitch: Wow.
Mitch: I look at this, they are good, 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, but as I said, I’ve had lots of friends work for Dell in Ireland.
Paula: There’s a huge centre there that manages the UK as well as Ireland.
Paula: And even actually, I’ve worked in recruitment over the years and anyone who’s come from Dell just seems to be super sharp.
Paula: So it’s a credit to the company, actually, I always like to know there’s very few companies that I would genuinely say, actually, that’s a really good pedigree to have.
Paula: So there you go, you’ve got a very good pedigree in my humble opinion.
Mitch: I was due because prior to Dell, my pedigree was a bunch of companies no one had ever heard of.
Mitch: So one of the interesting things at Dell is, we do, Dell has an internship programme where we do both undergraduate and graduate interns.
Mitch: So we’ll bring in really smart people coming out of college, very, very smart people, and they will be assigned a project.
Mitch: And then they will have to, they’ll have like five or six weeks to do this project and then they present it to our senior managers, senior executives.
Mitch: I had a, it’s an amazingly valued group at Dell 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: There’s an expectation.
Mitch: The one time I’d been in trouble at Dell is because no one explained to me how important the internship programme was.
Mitch: And I was really busy and this intern was like, hey, I need this data.
Mitch: I’m like, oh my gosh, it would take me a day.
Mitch: I’m like, no, I don’t have time to do that.
Mitch: I’m sorry.
Mitch: And I moved on with my life.
Mitch: Only the weight of the world fell on me.
Mitch: And I was like, oh my gosh, is this like Michael Dell’s son or something?
Mitch: I don’t understand.
Paula: Personal project, yeah.
Paula: Yeah.
Mitch: And they’re like, no, no, no.
Mitch: Someone had to pull me aside and go, no, no, no.
Mitch: It’s the intern.
Mitch: The internship programme is incredibly valuable at Dell and they use it as a way of fostering innovation and identifying talent.
Mitch: But I totally restructured the consumer loyalty programme in the US based on an intern project.
Paula: My goodness.
Mitch: And he was absolutely right.
Paula: Yeah.
Mitch: I mean, it was astounding to me how right he was.
Mitch: But that’s one of the things I like about Dell is that it values people at all, the organisation values people at all levels.
Mitch: 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: And so you see some dramatic changes coming from some interesting places, quarters.
Mitch: Yeah.
Mitch: And that makes for a, I think, a much more dynamic place to work.
Mitch: I think you get more innovation 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 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 I need something new.
Mitch: Yeah.
Mitch: We have a couple of interns doing a project this summer and it touches one part of the loyalty programme.
Mitch: And they were kind of careful in their initial conversation with me.
Mitch: I think they worried about stepping on my toes.
Mitch: And I’m like, listen, I’m praying that you guys are two geniuses because it doesn’t matter.
Mitch: You have to understand, it doesn’t.
Mitch: If you come up with something amazing that I’ve never thought of, that’s a win for me.
Mitch: I don’t know who has the idea.
Mitch: It means nothing to me.
Mitch: And I’m like, besides, I’m just going to steal it anyway, don’t worry about it.
Mitch: But no, it’s interesting that they are all over the loyalty programme, talking to a lot of the same people.
Mitch: Dell is a huge organisation.
Mitch: 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: The hardest thing was finding out who made it.
Mitch: I mean, Dell’s IT is 15,000 people and at times the biggest challenge is just knowing who to talk to.
Paula: What I’m hearing, though, is that loyalty is very well respected in Dell, am I right?
Mitch: Yes, it is.
Mitch: It’s getting even more so.
Mitch: I think people are seeing the value of loyalty outcome.
Mitch: I’m a big believer in that.
Mitch: My objective is our loyalty outcomes, whether that comes as the result of a structured programme or something a little less fenced in is a different question.
Mitch: But without question, and even more so moving forward, Dell values loyalty.
Mitch: For all the obvious reasons, it’s incredibly expensive to get a new customer, all that kind of stuff.
Mitch: But it’s taken a little bit.
Paula: But it’s also expensive to run a loyalty programme.
Paula: So I think that’s where the internal justification isn’t always.
Paula: And I heard you hesitate there, Mitch, 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.
Mitch: It does.
Paula: Again, it’s a credit to you and it’s a credit to them, and hopeful for the future for all of us.
Mitch: We’ve had to use, I started, when I took over the programme in the US, I started reporting out grudgingly at first, to be honest with you.
Mitch: I wasn’t part of my master plan to solve this problem.
Mitch: I just, finance put the thumb on me and said, hey, we need to see these numbers weekly.
Mitch: And I’m like, oh my gosh.
Mitch: I do not want to have conversations about weekly changes and redemption rates and all that kind of stuff.
Mitch: It’s complex.
Mitch: It’s just, it’s so overly complex.
Mitch: Yeah.
Mitch: And anyone who’s run a large points-based system, someone will make a statement, and you’re like, they’re like, is that true, like, ish.
Mitch: Yeah, kind of.
Mitch: It’s like, kind of true.
Mitch: 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 programme and get a more refined look at the flow of points and tie the flow of points to outcomes, 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 programme play out over time.
Mitch: And that time is rarely consistent with how the larger business views its own performance.
Mitch: And so they’re saying they’re asking you for performance metrics within a time period where you’re like, it doesn’t.
Mitch: Like, without going into great detail, if for our current loyalty programme, if we look at an active buyer, we’re not driving, the biggest value of the programme is not that I’m driving value in an active buyer.
Mitch: I’m keeping the active buyer for a far longer period of time.
Mitch: 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: And it took a little bit to sort of educate the business that that’s the form the value would take.
Mitch: And to do that in a way that was simple enough.
Mitch: I mean, if you talk to someone who’s senior, you have no time.
Mitch: You have…
Paula: Exactly.
Mitch: I always say it’s like the big red crayon, right?
Mitch: You have to communicate concepts with the big red crayon.
Mitch: Now, Dell has incredibly smart people.
Mitch: So it’s interesting, you know, you’ll do…
Mitch: You’ll report out something or you’ll present to somebody very, very senior at Dell, and you will have one or two slides and then 50 backups based on how you answer their questions.
Mitch: And you better know your numbers because they…
Mitch: I always laugh.
Mitch: I mean, they can sense fear and weakness, right?
Mitch: 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 talk about.
Mitch: And so it’s funny, you know, the loyalty at Dell is going to be an ever more expansive part of the business, and I’m excited to see the form that that takes.
Mitch: And we’re still early in the process, we’re defining what that is going to look like.
Mitch: But what I’m excited about is organizationally, we are dealing with all the things that we want to deal with.
Mitch: How do we, you know, how do we deal with the data that’s that loyalty programs throw off a ton of data?
Mitch: How do we make certain throwing off the right data?
Mitch: And how are we managing that?
Mitch: How are we using this to shape the customer experience across the entire breadth of the business?
Mitch: And then you have to understand with Dell, we are global.
Mitch: And we deal with everyone buying a tablet for streaming movies at home to a federal government buying mainframe computers, right?
Mitch: We were so broad.
Paula: It’s extraordinary.
Mitch: Yeah.
Mitch: And so we have to have a system that is incredibly fluid, that has sort of a rigid sort of exoskeleton.
Mitch: And then all of this flexibility on the inside that allows us to localize by region and by customer group and all of that, because just the margin rate between a consumer and, you know what I mean?
Mitch: Like it’s not even the same world.
Mitch: And yet we still have customers that sort of migrate up through that.
Mitch: Now we don’t have consumers all of a sudden owning a Banana Republic in there.
Mitch: 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, like how can you even foresee the requirements for a company like Dell?
Paula: Like, I mean, that’s the extraordinary part in my mind.
Mitch: 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, right?
Mitch: 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: Can you do that?
Paula: Yeah.
Mitch: The answer is not.
Mitch: It’s not a question of yes or no.
Mitch: It’s a question of how big the check is.
Mitch: I have to write it.
Mitch: That’s what I want.
Mitch: Let me start with, that’s what I want.
Mitch: Epsilon has been a great help in that they are a good sounding board for sort of directions we need to take.
Mitch: Anything you do in the modern world obviously rides on a support system of technology, and so I needed a partner that would work with us, has the flexibility to sort of step back at times, and they’ve been good at that and saying, listen, I don’t care what your system does currently.
Mitch: I don’t care what we are doing currently.
Mitch: This is the problem I’m trying to solve.
Mitch: Let’s find a way to do that.
Mitch: And they’re very good at stepping back.
Mitch: And then once we identify that, then trying to apply their technology to that solution.
Mitch: And at times we’ll adjust sort of how we’re going to go do something based on what’s more easily done.
Mitch: But I’ve found that that’s the best way to be innovative, right?
Mitch: Don’t worry about all the constraints.
Mitch: 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 confessed to being an avid reader slash cigar smoker.
Mitch: Yes.
Paula: I’m not sure which we want to highlight.
Mitch: 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 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: It’s funny, you know, I’m a huge believer in the psychology behind rewards.
Mitch: I believe if you understand that, then you can sort of innovate based on foundational truths that remain unchanged over time.
Mitch: One of the hard things about how people interact with rewards.
Mitch: Well, two things.
Mitch: One, the minute you insert any rewards into any system, you’ve changed it.
Mitch: And so you have to sort of have some awareness of to what impact that’s going to have.
Mitch: The second is people are full of crap, right?
Mitch: If I ask you what you want, what you tell me is not what actually drives your behavior.
Mitch: 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: I want to pay out rewards to do this and for this behavior to get this outcome.
Mitch: And I’m like, it’s not going to have any impact.
Mitch: It’s not going to do what you think it’s going to do.
Mitch: You know, there’s either unintended consequences or that’s just not how it works.
Paula: Yeah.
Mitch: And so I would strongly advocate like one of the first books I read is a book called Drive.
Mitch: And it talks in there about cash based system.
Mitch: It’s there’s it was just the first one I read.
Mitch: And so it’s kind of kind of a positive place in my heart from it.
Mitch: And I’m okay.
Mitch: I read I skim fast.
Mitch: Like if I’m reading something and I go, I don’t care.
Mitch: I move on.
Mitch: You know, I’ll blow right through.
Mitch: I don’t like try to get weighted down in some esoteric discussion of something that I know I’ll never use.
Mitch: And so I will go through books fairly quickly.
Mitch: But for me anyway, my journey started with the book Drive by Daniel Pink.
Mitch: There was this, it was going to sound really interesting, but there was one study in there and I don’t know why.
Mitch: It just even all these years later just so resonates with me.
Mitch: But they went to a preschool and they had they measured how many pictures kids were drawing.
Mitch: You know, they put out on a table, paper and crayons and then just count how many pictures people draw.
Mitch: And they divided the kids into two groups, and one group got a cookie or something for every picture they drew.
Mitch: And the other one got nothing.
Mitch: And the group that got nothing continued on at the same rate.
Mitch: And the one that got a cookie drew more pictures in the short term.
Mitch: And then eventually it took two cookies to get them to draw more pictures.
Mitch: And he took away the cookies and draw any pictures.
Mitch: And I can use that.
Mitch: It sounds crazy, but there’s a foundational truth there.
Mitch: And it’s absolutely accurate in my experience.
Mitch: And so I’ve had that conversation where for 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: I’m like, okay, that’s fine.
Mitch: But please understand, you aren’t going to go back to the baseline.
Mitch: You’re going to go below the baseline.
Mitch: That’s what happens when you start paying a reward out on something.
Mitch: And I use that explanation when people want to start paying rewards out, transaction rewards out on something new.
Mitch: I’m like, listen, that’s great.
Mitch: We can do that.
Mitch: You will get more of it.
Mitch: But please understand, there is a predictable cycle to this.
Paula: Yeah.
Mitch: And it holds true anytime you release rewards out into that.
Mitch: If anybody has, anybody listening has a book or any content like that, please let me know.
Mitch: Paula has sent me some stuff and I’ve started to devour it.
Paula: Wonderful.
Mitch: It’s actually hard on me.
Mitch: I just spent a week off and I had made myself read something else.
Mitch: But there’s so much great work out there and I sort of find it just endlessly fascinating.
Paula: For sure.
Paula: And actually, Mitch, have you heard of a gentleman by the name of Yu-Kai Chou from Stanford University?
Paula: He lectures on gamification there?
Paula: So I am going to make your day, hopefully.
Paula: But yeah, he’s…
Mitch: I’m writing it down as we speak.
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: I’m the same way.
Mitch: I’m the same way.
Mitch: If I could go back in time, it would be behavioral psychology and economics.
Paula: Yeah, perfect.
Mitch: To me, because the interplay between…
Mitch: We all want to be rational.
Paula: Yes.
Mitch: But we’re not.
Paula: Yeah.
Mitch: We’re just not.
Paula: We’re totally not.
Paula: No, no.
Mitch: 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: None of us have a clue.
Paula: Actually, it’s not them.
Paula: It’s us.
Paula: Yeah.
Paula: You’re totally…
Mitch: No, no.
Mitch: I am no better.
Mitch: I like to think I’m self-aware, but the reality is…
Paula: Yeah.
Paula: No.
Paula: No.
Paula: Brilliant.
Paula: So I will link to that one.
Paula: I’ve remembered it’s called Actionable Gamification, so I’ll make sure to link to that in the show notes.
Paula: And the book that you mentioned also, Drive, as well, Mitch.
Paula: 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: No.
Mitch: Other than, like I said, if anyone has any content out there, please…
Paula: Send it over.
Mitch: I would love to see it.
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 The Wise Marketeer, the world’s most popular source of loyalty marketing news, insights and research.
Paula: The Wise Marketeer also offers loyalty marketing training both online and in workshops around the world through its Loyalty Academy, which has already certified over 150 executives in 18 countries as certified loyalty marketing professionals.
Paula: For more information, check out www.thewisemarketeer.com and www.loyaltyacademy.org.
Paula: Thanks so much for listening to this episode of Let’s Talk Loyalty.
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