Flourish in a Flash: Incentive Marketing Association Summit Recap

Episode Transcript

Please note: Transcripts are computer generated.

Intro: (00:04) You're listening to the Flourish in a Flash Podcast with the Flourish team, Dez, Holly, Kristen and Erika.

Holly: (00:16) Hello everyone and welcome to another edition of flourish in a flash. You have Holly, Dez and Erika on with you today. And today we're actually going to recap the incentive marketing association summit that we all attended recently and we thought we kind of go over a little bit about, you know, what we took away from the event, some highlights, our experiences and just share that with all of you so that you kind of know what's going on in the industry from that perspective. And how that ties to, you know, branded currency in particular. So I don't know if, uh, Dez or Erika, do you guys want to kick off with a little bit about, you know, day one, and I know they do a really interesting thing where they partner newcomers with mentors, so that people can meet people within the industry, which really speaks a lot to this industry and how connected we all are.

Erika: (01:13) I'm happy to jump in here. This is Erika, as everybody knows, I'm pretty new, relatively new to the industry. So, and this actually was my first event for the industry, so it was quite exciting and I was a bit nervous to be honest. Cause you know, there's a lot going on. There's a lot of people, a lot of names, a lot of information. Well I found that, the newcomer reception and being paired with an existing member in the industry was really, really a great idea. It made me feel a lot more comfortable. Um, I didn't feel, you know, nervous about approaching anyone because I was kind of introduced to a lot of people in it. That opened a lot of doors for me. Um, in terms of comfort zone and recognizing faces and you know, being able to wave to people that I met for the first time.

Erika: (01:58) And you know, I just thought it was a great way to, you know, be introduced to new people. I'm feeling comfortable in the situation and also learning a lot of new information. I would kind of jump in on conversations, be introduced that way, and then hear about what people are talking about in the industry, whether it be, you know, personal information, you know, just sharing funny stories about pasts or, you know, talking about other events or, you know, conferences that people go to within the industry. So honestly, every conversation that I had, what's quite educating to me, even though some people might not see it that way, being a newcomer into the industry. So I thought that, you know, a new member entrance way that they do is really, really fantastic, especially being like a niche industry and, you know, let's face it, everybody knows each other, we're all friends, but when you're new to it, it's kind of hard to jump in then, you know, I feel comfortable in it. So that was a great way to be introduced and I really, I really appreciated it.

Dez: (02:57) Yeah, I would agree. Um, a few years ago was my very first industry event and this year I had the unique opportunity of being one of the mentors for a newcomer. Um, and it was kind of a full circle moment and what I can speak to kind of having been on both ends is for both sides. What you get out of it is really like, it equates to what you put it in. Right. Um, my first year as a newcomer, it was really nice to have someone where I knew I could email them a couple of weeks after or even, you know, like just this point person in the industry where maybe, you know, my team had a question and we needed an additional perspective or just someone else to go to. Um, and that program really, really helped providing that space. And then as, as a mentor this year, it was a completely different perspective because you realize everyone feels the same way. Um, because the industry is so small and we do, we do know everybody eventually. Um, it was, it was nice, um, to be able to look back and help people feel less awkward. At least I hope I helped people feel less awkward, um, because it can have that high school vibe, the cliquey vibe. Um, but by having programs like this, it helps break down a lot of walls and you know, in that room., there was no such thing as competitors. You know, we were all just there having fun to um, help a new generation, learn about the industry

(04:36) totally well and to talk about, you know, learning about the industry. I think, um, there were a couple of really interesting sessions that I know we wanted to talk about in particular on that we think is pretty valuable to share with the wider audience.

Speaker 1: (04:50) Um, so just kind of going through the agenda in the order that it was, uh, Dez and I were actually, excited because we got to present a session called Gen z attitudes towards gift cards, loyalty programs and incentives. Back in April. We had partnered with the IGCC to go to the American Marketing Association. Um, they have a collegiate conference every year with thousands of college students come together to learn about marketing, to compete, to do all sorts of things. So one of the things we got to do was host two focus groups. It is hard to say host and focus. I don't know why, but we were able to do that. And so we were able to talk with 41 college age students about their attitudes and uses, um, for these products. And what we found was, you know, in particular this audience, I don't think it's going to behave much differently than previous, um, than previous generations, but there are key differences that are going to make all the difference.

Holly: (05:57) Um, so, you know, I thought maybe we could tell you guys kind of our top five trends, I do believe the IGCC is going to be sharing the presentation out. Um, so if, if they share it, we'll definitely set up, you know, we'll make that available to everybody on our website. Uh, but otherwise if they don't end up sharing it out, we'll be sure to share out, uh, the information that we gathered. Um, but so to talk through some of the trends that we saw, um, I would say number one we had personalization is going to be huge. And one important distinction that we made was the difference between personalization and customization. And, you know, that's, feel free to hop in whenever. But you know, we often sometimes think that, you know, to be personalized it has to be a super custom thing and it doesn't, it can be your restaurant and you've great hot sauce.

Holly: (06:50) So pair gift card with the hot sauce. Um, we use the example in our presentation of like an initial, you know, having like packaging that had, you know, if your name is Adam and you're getting a gift card, so having an a on something that you're giving to somebody. Um, so, you know, personalization is going to be huge, especially with this, with this up and coming generation, they expect that from us. And so we have to be able to understand how do we adapt our models to meet those expectations and how do we do it in an economical and efficient way. Yeah.

Dez: (07:23) Well, and with the customization piece, it ties to the larger, um, kind of topic that was all throughout the presentation of experience and having things be shareable. Like everybody, this generation wants it to be instagramable. That was one of the biggest buzz words throughout the presentation was instagrammable and customization is a pretty easy way to have that moment happen as well as creating this. Even though it's customize, it feels like a personalized experience of your brand. So a, it's one way to have it be a bit less work for you but have a higher impact with the consumer, which I think is just, you know, something to kind of consider when you're looking at, you know, designs, offers, things like that.

Holly: (08:15) Totally. And then the other thing that we discussed was omni-channel and what that actually means for our industry because I think it's, it's a little different than what it looks like, um, for other industries because we also have to take into account form factor and this generation expects a fluid form factor. And by that we mean if you have a physical card, it should be able to be redeemed, digitally stored, digitally, sent digitally, that you can't just say, oh, that's an easy card. We don't change that to a physical card.

Holly: (08:51) Or if that's a physical card and we don't allow you to store it in a wallet or redeem it from your phone, that way of thinking has to go. We understand that people do that for security and fraud mitigation purposes, but we are at a point where we do have the technology now in place to help. So look at this as more than just a physical card or measuring it just as a physical card. It can be a lot more. And when you look at consumer trends anyway, what you're seeing is consumers are using your products in different ways and gift card and loyalty points are no different. People are making it their own and that plays into the experiential piece, right? So people are making their own experiences out of this. We have to meet the consumer where they're at. So we talked about contextual commerce and contextual engagement and interactions and that's a big piece of it. You have to meet the consumer where they are, uh, when they are and however they want to be using your products and experiences. [inaudible]

Dez: (09:58) I know, I'm curious though with Black Hawk spoke more about the contextual commerce as well as, um, kind of trends that they're seeing in terms of, you know, overall spend and, um, Holly, I, you started to speak to gamification as well in terms of not only contextual but where, what does contextual mean for this generation? Oh yeah. I don't know if you want to speak to that at all. It was one of my favorites because it's so fascinating.

Holly: (10:29) It is, and it's weird because gamification, it doesn't have to be super complicated, right? So, um, there's, there's a couple of things here. So number one, this generation, they are gamers. Like it is amazing to me how many of them are, I mean, you know, playing on a console at home, but then when you think about it, how many of us have like candy crush or something on our phones? That's gaming, that's still a video game. And so we have a generation of people who have trained themselves to play games when they're bored on their phone and that's where they are. So they actually like the idea of playing games with your brand. They also, you know, are going to be living in fortnight. So meeting them in those, in those virtual worlds, is becoming a big opportunity for brands as well because that's where this generation is. So gaming game-ification, um, earning points for specific behaviors is very much ingrained in the, um, in the psychographics of this generation. I'd say they're very used to it and they will and they like loyalty programs. They like earning points for doing these things for your brand. So I think as long as you understand that, you know, whatever their actions are, need an equal reaction from you, they need an equal reward. You're going to have a very engaged audience that's going to tell you exactly what they're looking for from you. So they're very open to these types of things. And it doesn't have to be over engineered. That's the other thing. I think it's, it's simple. I mean, this, um, leaving us a review, it's going to get you a hundred points. Keep it simple, keep it clear. We said that in previous episodes, but you're, you're, we're walking into a generation here that's, if you just lay out the rules, they're going to play the game. So it's, it's really exciting I think for brands right now in loyalty and incentive programs in particular,

Erika: (12:34) it's also a great opportunity for word of mouth, you know, in terms of gamification. Cause I mean everybody talks about what they're doing on their phone. Are they checked out, you know, a new opportunity, right. And be like, Hey, did you, did you know that this company does this? Check it out. It took me three seconds. I got a hundred points for it. You know what I mean? They're all about talking about that kind of kind of stuff and sharing that type of information and it just puts the company in a really bright light.

Holly: (12:58) You are so right. It really does. And if it's fun, yeah, people are going to keep coming back and they're going to send their friends to do it.

Dez: (13:07) Well and fun ties in with experiential, right? Having that experience to interact with your program. Um, and that kind of makes me think about a couple of other elements at, I am a, just to shift gears a little bit, there's so much with the Gen z. Say the presentation was 90 minutes, so we could talk about that for a while. But in terms of experiential, we, one thing that I noticed as a trend leading into IMA was there were other presentations creating experiences for the audience, which I thought was so cool and unique and yeah, Holly to your point about keeping the experience in programs like simple, these experiences weren't complicated. It wasn't like the audience was acting out a skit or that we had to like become teams and learn rules and all that stuff. Like one that I attended was about employee incentives and there was a whiskey and scotch tasting. So bottles were just being passed around. And they use that analogy to well, what is an incentive versus a reward and do the names matter. Um, which I thought was really, really interesting. And now whenever I drink whiskey or Scotch, I'm going to tell people about that. One time I went to a conference and did that, did a tasting at 11:00 AM.

Holly: (14:31) And I think you've Paul Hebert, Vice President, Individual Performance Strategy, Creative Group to thank for that one. So everyone, Paul Herbet, you know, go to his sessions, he's given out booze at 11:00 AM. It doesn't get much better than that on a Tuesday at a conference. Well Oh, so what were some of the takeaways from that one, Dez?

Dez: (14:52) Um, really, you know that it comes down to the terms we use as employers and with teams and that they do matter in terms of strategies for engagement. This one wasn't specifically around gift card, but um, you know, to incentivize and reward your, your employees and your team. I know for gift card managers and stuff, um, yeah, promote having your team engaged is really big. And one of the key things is, you know, you can use an incentive to drive longterm behavior. So if you're looking at shifting like gift card sales or I'm really pushing a trend, like the notch in one direction, then having some sort of incentive program is going to be key. But if it's a, if it's a fast action goal that you're trying to hit, then a reward is going to be kind of more at that. So I think, and that was another thing that I learned all throughout the conference was just when you think something may not be super applicable to your, your specific um, field or niche, it actually ends up being truly applicable.

Holly: (16:01) And while you were doing that, Erika and I were able to hit up some of the gift card hot topic round tables, which was pretty cool. So I was able to sit in on promotions and arbitrage. And so Jim Atten from Retail Me Not was leading the discussion at my table on that. And it's really interesting having worked for a secondary marketplace before this, it was interesting to see that not much has changed in terms of arbitrage the behaviors of people who are doing gift card arbitrage. And for those that don't know what that is, that's when uh, someone will take advantage of let's say, let's say you get an email and it says target is selling on Starbucks gift cards for 5% off. And so you would go and buy a bunch of those at 5% and then maybe resell them on a website for only a 2% discount at like a raise.com or Card Cash. So that's gift card arbitrage. It gets much more complex than that. People stacking points on their credit cards, pulling coupons from other places. There are whole networks of people sharing this information saying if you use this reward credit card, combine it with, with this coupon and take advantage of this discount right now that's going on specific to this gift card. You can save let's say like 15% and then you guys should go to this secondary site or resell it, um, for a 10% discount. Like there are whole strategies out there. There are tons of people that this is what they do all day long. You know, the big issue is that if I'm a retailer and I'm giving let's say, Black Hawk or income or one of those companies that do a lot in my third party sales, a rich discount, so that I can have a good promotion and see $2 million in, um, top line sales from it. Um, well if it's all going into gift card arbitrage, is that a, is that a good strategy? Uh, what's the benefit, you know, is it actually profitable in the end? And that's really what we were getting to the heart of, um, while we were at these tables was how do you measure this and how do you figure out, you know, what is a profitable promotion looking like? Then in the end. So a lot of this has to do with access to data, combining data from different a places as a retailer and getting that information from your partners. So I don't know if Erika, you were able to join crypto or how digital delivery is impacting.

Erika: (18:31) Yeah, I was able to join the round table about the cryptocurrency and gift cards. And it was fascinating because I don't, I'm going to be honest, I don't know much about crypto currency, bitcoin or anything, but it's been talked about all the time. Like every single week I read another article or I hear another person say those words. And like I even went to the gas station and the other day and there was a big bitcoin sign, bitcoin, um, you could pay with bitcoin here. And it was like flashing in the window. And I was like, oh, oh my God. You know, like, it's as it's popping up everywhere now. So I was really excited to join that round table. And when we were going around, we were introducing ourselves and where we're from and you know, why we're there and that kind of thing. And we also were asked to express, you know, why we're at that round table, how much do we know about crypto and bitcoin? And you know, what, what do we want to share at the table? And the vast majority of the people were like, I don't know much about it. And that's one of the main reasons why I'm here. So right now, one of the reasons, you know, one, one of the things we really need to do is just get that communication out. There was a few individuals at the table that have a lot of experience with bitcoin and crypto currency, which was fascinating to hear. So right now it's like a very strong learning curve for a lot of people in the industry to learn what it is, how they can get involved in that, what you know, risks or you know, difficulties that'll entail in the long run. But the first initial step is to just learn from each other and find out what it is and how it can be applied to them. Which I found really fascinating during our conversations because there was all levels from like, I've just heard the words before, do you like "I own some, I know what this means". So it was really interesting to like kind of weave everything together and start learning from each other and growing from it.

Holly: (20:19) Well, and it plays a really interesting role in loyalty and gift cards in particular because block blockchain, you can track so much and it's an immutable ledger, which means you can't change it. It can't be altered. It, it's frozen, it's there, it's once something has, once someone takes an action on the blockchain, whether it's, you know, depleting a balance debiting a balance, adding to a balance, it is all recorded and it never goes away. And so that's really going to help with fraud. It can really help us understand consumer behavior. Um, and it will also help us combine the data from loyalty and gift card and hopefully create a way that makes it so that we're not seeing breakage that we're not seeing, um, people, you know, yeah. Not using the gift cards or we can make sure then that no one is stacking a stacking promotions, et cetera. So there's a lot of potential here in particular for our industry. And so I agree with Erika. I think it's really important that we talk about it a lot and that we really do start learning from each other and see the applications. And our industry.

(21:21) Another thing that was brought up was the Facebook, um, currency that was coming up. Yeah. And you know, the majority of the people were really nervous about it, but at the same time, a lot of people are really excited about it because it's, it's going to bring the cryptocurrency idea to a new light, to a more comforting area for the typical individual. You know, where most people think that, you know, the whole bitcoin, cryptocurrency, that kind of thing as far as some financial people that know a lot about that stuff. Whereas, you know, the fact that it's linking to Facebook, it's kind of normal, like they're trying to normalize it, which I think is a really important educational step.

Holly: (22:03) Absolutely. And you know, you guys, if you want to learn more about Libra, check out our last podcast with Hannah Rosenberg. We talked about Libra. Um, she's a fantastic resource. She understands ecommerce and Crypto, so she's a good, she, it was a really fun episode to, to do with her. Um, all right. You know, we just spoke a little bit about breakage and I think that, uh, Brenda Gilpatrick gave a great presentation on the state of breakage in the US in particular for gift cards. Um, and she does so much analysis looking at annual reports and making estimates for like the actual size of it in the US I know Erika, you got to sit in on it, but it was kind of your first time dealing with breakage as a topic

(22:56) Yeah. That was mega data overload. Yeah. Yeah, that's fascinating. Like I, you know, like that, like you said, it's new to me. So, you know, I was just kind of, you know, trying to understand all the numbers and where it's coming from and to be honest, some of the definitions and what it all means, but when I took a minute to like step back and realize what we're talking about and what all those numbers mean, it's fascinating. It's one of those things where like, because I'm so new to the industry, I never realized so much effort and thought goes into gift cards. But then now that I'm introduced to all this, including breakage, it's so fascinating. And now that like, I know that's a part of it. It's, it's heavy stuff, you know, that's some major data you really need to look into to keep track of it all. And for me, that in and of itself was fascinating. You know, the, the data was wow beyond the level that I was at at that point, but it was an introduction to me realizing what it all, what all needs to be considered. And I found that really fascinating and like major learning for me.

Holly: (24:05) Dez, did you have anything you wanted to add to the breakage discussion? I know you and I kind of popped in at the last, we only got to see like half of it and I'm, I'm looking forward to reading the full report, um, because it's, it, the number is bigger than what was estimated, um, by some other organizations. So breakage is huge in the US and it's not something that retailers want. And that is a big thing. I think PR wise, our industry needs to, you know, let people know we don't like seeing you not use your gift card. It's a liability on our, you know, on our, um, it's a liability for us. And so we want to see that money come back in.

Dez: (24:45) Yeah, I will say that was kind of where my mind went because you're right, we were able to just feel a little piece of that presentation. I'm excited to, review the rest when it's available, but when I did see that number, my first thought was, okay, well how do we combat this? Like how do we get people back in store? Which it's something that we're constantly talking about trying to figure out. There's no one right answer. There's no easy answer really. Um, because it is so brand dependent and so strategy dependent, but I think it, yeah, it's a good starting point to know the road we have ahead of us as an industry.

Holly: (25:25) I would absolutely agree with that. Um, and it's interesting. I, you know, what I would love to see is how that compares to other markets. I know there was also, um, a session on like going international and you really do have to, I mean, no matter what country you go to, I mean in the US we know state by state gift card laws are different.

Holly: (25:44) And then if you go into another country, uh, there's significant differences as well. Like who, uh, you know, what, uh, what governing body gets to say like these are the regulations for gift card. What are the regulations? You know, escheatment is only really a thing in the u s so, you know, you go to Canada and the UK, you're going to see those guys, you know, trying to attach a gift card to a membership account or to identify who's holding it because you know what, there's no, there's no harm in it for them. They're not going to have to escheat money to the government. And if you don't walk back in in five years and use the gift card. So that's kind of, that's always interesting to hear the international panels talk about, uh, the challenges they have, but also some of the really interesting advantages they have because escheatment is not an issue. And then, you know, I think, I don't know, did you guys have anything else you wanted to talk about? I know there was a good fraud session. Um, and a lot of people found that pretty fascinating.

(26:53) Yeah, I was able to attend that one and you know, again, me being new to the industry, I found it fascinating to hear about some of the issues that come up. But what I really got out of that session was the need for collaboration between within the industry. So you know, a lot of, you know, companies are competitors but know putting that aside and learning with each other because this is a pain point for across the board and just coming together, sharing information and learning so that, you know, everybody's life could be a little bit easier with a fraud because that's a really difficult and painful topic that is not easy to find a solution to. So like coming together and learning from each other and becoming stronger. Um, that was one of the biggest out comes of the session that I went to and I found it really fascinating the conversation and learning, you know, some of the issues that come up, it was acronym overload. I must confess of all the, all the companies that you can, organizations you can reach out to in order to try and get help. But you know, like even just, you know, for example, like a certain money amount, if it doesn't hit a certain money amount, the, you know, the, the company that you're trying to reach out to or organization isn't even going to bother taking the time to help you because it's not worth their time. And I just found that fascinating. Like we're talking about tens of thousands of dollars, but they won't even blink an eye. Because that's, uh, not worth their time.

Dez: (28:19) And that there are no standardized amounts from the federal government to like launch an investigation. Like that was, that was one of the things that completely blew my mind was, you know, depending on who answers the phone, when you call to report something, their perspective influences whether or not it's a federal case. .

Erika: (28:38) Yeah. And I, you know, it's just so frustrating for someone on the other end that like where it's just, it doesn't get anywhere right. When you're really trying to make a difference, you're really trying to fix something but you just walking in circles so you just kind of throw your hands up in the air and you give up at one point when that really shouldn't be the case.

Holly: (28:55) I totally agree. Yeah. Collaboration. It's, it is a huge, it is, it is actually like a very big part of this industry and always has been. It was the theme of our first year of Flourish, in fact. Um, it was like how do we all work together and why partnerships matter, but the, the sharing of data, it's, you know, everyone's very nervous about sharing data and rightfully so, but it is becoming such an imperative, especially as we fight fraud. Um, well, and then, you know, we were also fortunate enough you guys to be able to throw a little, a little reception. On Tuesday night and it was so fun to see so many people, um, and introduce, uh, quite a few people to Flourish. Um, so we were able to host it at our, our venue for next year, the Radisson Blu Aqua in Chicago, Illinois. So we're very excited to be, uh, using that gorgeous venue for our 2020 Flourish conference. Um, but yeah, the night overall was, it was really fun, like lots of great conversations and good drinks, good food, gorgeous weather. Chicago held an out. Whereas I was so excited, I did not know if the weather was going to go our way and it did. Uh, yeah. You know, events like this are always just, I think just important. You know, there's a reason we also started Flourish. It's because you need the time to get together to talk, to collaborate, to understand what everyone's pain points are. And so that's, you know, that's the beauty of events like this.

Dez: (30:30) Yeah, exactly. I mean, we've talked about collaboration a lot and the networking events, the times to get together and have those conversations and create actual relationships, those are the moments that are really gonna push the industry forward because yeah, when it comes down to sharing data, it's not really a business to business transaction. It's having this relationship with someone else on the other end that you know and trust. Um, and that's, that's why conferences are important to connect to kind of like the broader circles of the industry and outside of, you know, your immediate industry. Um, and then having the networking times to put, you know, a face to a name. Um, someone that you've emailed 10 times that haven't actually met. Um, things like that. It's so important in that it's my belief that that's where the growth happens.

(31:23) I agree. And I think that just relaxed atmosphere just kind of put everybody at ease. It wasn't looking at the clock like, oh my God, I have to go run to the next session. I got to cut this short. And it never ended up getting to finish that conversation. You know, this kind of gave an opportunity where everybody just had a drink in their hand. Everybody was relaxed. Like you could just approach wherever you'd like. Everybody was really open and you know, just to kind of put it in a nutshell, one of my favorite quotes of the night was someone saying it's kind of like a big group of friends getting together and catching up. And I feel like that was really important. That was what we were going for because we feel like that's so important and we're so glad that somebody said that because it kind of put everything, it lined everything up for us.

Holly: (32:06) It did. So all in all IMA was an awesome experience. They always do such a great job and you know, it's always amazing to me. Um, how interesting and different the content is year over year and the great connections we're able to make are just, they're invaluable. Right? So, um, you know, definitely if, if you do get the chance, check out all the content that IMA is pushing out there. Um, we are always sharing anything that we think is applicable to our audience. You know, either we talk about it on the podcast we'll put in our newsletter. So make sure you guys are following us. Um, we are, Dez, does a great job in particular of sharing everything out for our audience and uh, you know, stay tuned we're actually, you know, events like this also gave us the ability to, um, meet people and get them to be guests on our podcasts and write blogs and bring their expertise to our Flourish audience. So, uh, definitely look for that in the coming months. And otherwise enjoy these beautiful summer weeks and we'll see you guys on the next flourish in a flash.

Outro: (33:18) Flourish in a Flash is produced by K+H Connect, a branded currency consulting firm. You can learn more about K+H at khconnection.com and you can always find out more about Flourish and the Flourish Conference at flourishcon.com Or follow us on all of our socials on Twitter, Facebook, and linkedin. It's at flourishcon and on Instagram it's at flourish_con.