The Role of Technology in Promotions Personalization – Voucherify & OVO Energy Webinar
Thank you all for coming. I'm Mike and today with my guest, Victor, we'd like to talk about how technology can help you sell more through personalized promotions. Within the next 30 minutes, we're going to tell you about what is a personalized promotion, why it's important today, and what does it take, technology-wise, to make personalized promotions an essential marketing tactic. We're going to share some experience from top consumer companies One will be JustEat and another OVO energy, after we discuss it, I'd like to open a Q&A session so if you have any questions, you can write them in the chat on the right-hand side and we'll address them later on. A little back story – I'm a co-founder of Voucherify. We're an API-first Promotion Engine for digital teams and today we work with more than 300 customers around the globe, including Vodafone, DB Schenker, Burger King, EasyJet, and OVO Energy. OVO is an energy
retailer that helps more than five million customers in Europe to save money, to cut their carbon footprint and they have an ultimate goal to become a net-zero carbon business by 2040. The Netguru Disruption Forum is all about trends and today I want to talk about the trend that has been materializing for some time already and this is about deals – our research shows that people love deals, they always seek coupons before buying, they prefer businesses that reward them for being a loyal customer, and this is the trend that is with us for some time already and personalized promotions are an answer to this phenomenon. This is even more important today in the light of recent privacy changes to iOS and Android. We can see that consumer businesses that collect and process first-party data to personalize the shopping experience are on the rise and they use it with great success. So, what is a personalized promotion? Well it's a marketing-based strategy that uses an incentive or a reward to increase the conversion rate, for example for customer acquisition and for customer engagement which is driven by consumer data and these data include several things – it can be customer preferences, order history, location, customer touchpoints, payment method, and any different channel that is relevant for the shopping experience and we can see that customers love personalized experiences, especially when they receive personalized promotions. This comes down to several tactics. This can be a coupon, this
can be a cart-level discount, this also includes loyalty programs and friend referral schemes so the range of personalized promotions tactics is wide and we'll talk about it in a minute. Today some DTC brands use personalized promotions to a great extent. You can see here Shein, which is a fast-fashion business from Southeast Asia. They used 7 deals on their landing page only
if you start shopping with them. If go to product pages, customer profiles, checkouts, you will discover that there are many more deals prepared for customers to incentivize them, to re-engage them and Shein is not the only company that uses this strategy to incentivize customers. Another one is JustEat and this is why I invited Victor, who worked for JustEat previously and he was responsible for growth there. We'd like to share his experiences now. Hello, Victor. Hello, Mike. Thanks for having me. Can you tell our audience why promotions were important to JustEat? Just very briefly for those who don't know – JustEat is an online takeaway company, basically, it allows you to order food delivery from restaurants nearby and vouchers were really big for JustEat for a couple of reasons. One, the market is super
competitive in food delivery, it was also when I was working there, there's this thing of economies of scale and the first player takes all. You can see many second players in countries leaving the market because they're the second and they need to be the first to make a profit. Because I was working for the Spanish brand and culturally Spain, Italy and Southern Europe was a very price-sensitive market in general and then also the players in the food delivery industry flooded the whole market with vouchers so we set the baseline to the point that if you were not offering vouchers, people wouldn't even consider ordering from you. In many cases we had the same restaurants, the same food as other takeaway companies so to differentiate, to be better, you'd need to use vouchers. It's true because people love discounts but they are fed up with mass discounts, like one-size-fits-all. I guess that
you won't be satisfied with a coupon for a burger if you're vegan or you need a different discount for pizza and sushi, so can you tell a bit more about how you personalized your promotions and how did you experiment to figure out what works and what doesn't? Basically, we did a lot of testing in this aspect, not only from the customer's point of view, like if they are vegan then give them a voucher for something vegan but also from a business point of view – you wanna make sure you work on the right metrics, so for example for growth you want to acquire so vouchers for new customers. You want to reduce churn then you have to be a customer that hasn't ordered within x amount of days. Revenue, how could we increase the revenue of the business? Just increase the frequency – if you order three times within x amount of days then you can use this voucher. If you are there just twice then you don't get the full discount.
So we played a lot with that and the thing is we started with standalone codes. For those who don't know what standalone codes are, basically it would be like a very generic term, like JUSTEAT15. That could be a standalone code. We started with this kind of voucher codes but as soon as you reach
a critical mass you cannot play around with that kind of vouchers anymore because you lose control, they get leaked, people on forums start putting them there, so we had to switch to dynamic vouchers that were specifically for the customer we wanted to receive that voucher. That's basically what we did at JustEat and then the next step after that was creating the referral but it worked a little bit weird because it was like a completely separate platform. Speaking of that, what did it take to launch personalized coupons technology-wise? Technology-wise it was a quite complicated structure at JustEat. We had
a central team in the UK that was serving the technology of all the markets and, of course, the needs of the Netherlands or Canada, or Australia are very different from the ones in Spain. This team managed to create a very strong voucher tool but the problem was that it had very little local responsiveness and it was made very rigid. This rigidity is positive because you limit how much marketers can screw up their own work, like the tool, for example, once you set an expiry date for a voucher you couldn't move it.
It was good because you can prevent errors from the marketing team but at the same time if someone had made a mistake and needed to move the expiry date of a voucher, we would need to contact the tech team in the UK and that would take forever, so it was a very complex tool. Plus the way it was created, first we started with standalone codes, then another tool was created on top that allowed us to do dynamic and then the referral. It was quite complex. I see, so you had the flexibility to some degree but the more complex your campaign became the more communication overhead and waiting you had. Exactly, also flexibility for marketers would imply fragility in the tool so if you are able to do a lot of things then it would take longer to develop, plus developers have to take into account that the expiry date is always after today, that you cannot put like one in the year-ago, things like that. It was a very complex tool. This sounds familiar to me because our customers complain about the same things, right. When we take a look at the technology space, especially for
promotions, you can see a pattern of similar problems – you have many customer touchpoints, that you need to integrate, you have new marketing channels that you want to connect to when there is a trend or something. Also, problems coming from inter-departmental communication and many data sources. Today a modern marketing team uses more than, I guess, on average it was like 30 tools, so you have a lot of tools, a lot of data isolated that you need to connect to make your shopping experience personalized and we hear about this kind of issues more and more and decided to create a tool for that and you are a user of this tool, right? So can you say how you managed to run and maintain promotional campaigns today at OVO. Yeah, as you mentioned before, OVO Energy
is an energy supplier, in the UK it has like 10 years of history, in Spain just two and the structure is a little bit different from what we had at JustEat in the sense that we have a very small team of developers but they're very country-oriented so it is good because you have a lot of responsiveness business-wise. If you need something you have the tech team that knows exactly what you need, the problem is the size of the team, so with such a limited size team it's very complicated to create a tool that would allow us to create a voucher or a referral program in-house, it would be impossible really. What we saw is we had a very good Net Promoter Score, also our customer service team here in Spain is one of the best, you can see like the Google ratings and everything, it's amazing – plus, in the energy industry trust is a big factor, word-of-mouth. If you're gonna change electricity company you have to trust that company and the best thing is if a friend recommends it. It's not like a takeaway that you can order
and if it ends up not arriving then you lost 20 Euro. Here it is a little bit more tragic, you are playing with the electricity supplier of your house, so taking into account those two factors – that word of mouth is really important and the fact that we needed to grow fast and we didn't have the resources, we started looking for tools that would allow us to create a referral program outside the tech team, that we wouldn't need tech reliance. And I guess you found Voucherify and you introduced it as your promotional tool. How did you design your referral program and why Voucherify was useful? Actually, we were doing a little bit of benchmarking and we got the tip from our colleagues in Australia that recommended you and said we've been talking with Voucherify, and it looks like a very powerful tool. I didn't know that it was possible to have a referral tool in one with vouchers and our core focus was referrals. I decided to do a little bit of benchmarking looking at
what our competitors are doing, is it one-sided, is it a two-sided referral program, how much are they giving, what's the amount, is there any capping because capping is an interesting one – if you don't cap it in the short run you get a lot of traction, people can start recommending like crazy, but in the long run, when you want to cut it you have a problem, you have people that made up to 1 000 Euro thanks to the referral program and sometimes it's scams so a lot of work in the benchmarking. Also, my experience told me that if you get it right from the beginning it's much better than trying to change referral programs, not because of the complexity, like operationally but also from the user point of view. If you start changing the conditions it can create a lot of problems. That's right, by the way, I can share that recently we launched an ebook on how to design referral programs so if anybody is interested in learning best practices on how to design it in the best way possible from scratch, then just go to our website and visit our promotion hub to find it. I would have loved to read that one, it would have been super useful. Let's talk about results, how did it go basically with your referral program? Results-wise we couldn't be happier, right now one-fifth or one-fourth of the sign-ups that we have at OVO Energy come with a redemption that could be either from referral program, standalone codes, or dynamic codes, but the largest piece is the referral program, so we're really happy. We even tested a flash sale so
during x amount of days if you invited a friend you would get double the incentive and it worked really well so we couldn't be happier. Also for companies like OVO Energy in Spain where we have a limited budget, we're not over in the UK that has more strength in terms of budget, for companies that have to look a little bit at the budget, it's actually very helpful that it's affordable. To put it in a nutshell, the referral scheme is a core strategy to acquire new customers, but you experiment with other channels, like standalone coupons to incentivize even more customers, right? Yeah, that's a cool thing that with the same platform you can do both, so in the end, I started with the referral program which was the core focus, but now I'm using standalone codes a lot. One use case, for example, is that we have agents picking up the phone and trying to help customers, people that call sign up, and we give them a standalone code and if they see that they cannot sign up the customer, they can use this voucher as something exceptional, so it is really really clean because it is either the agent putting it in on our website or they give the code to the customer and they can sign up on their own whenever they want. That's that's a nice way to incentivize the customer, so basically what I can learn from your story is that Voucherify became a central tool to run your promotions and this is a pretty common thing that our customers start with one tool and then they experiment to figure out what works what doesn't and Voucherify enables them to make it smooth, so they don't need to wait for the tech team to react, they can manage it on their own, at the same time developers aren't bothered with requests, like "hey, please delete this voucher because it's getting overused" and the managers are happy as well because the time to market is fast and they don't need to wait a couple of months to implement a promotional strategy. Can you say how long did it take to launch your referral scheme?
It took a couple of months, maybe three or four, but because of my time and the product manager that was helping me to think about the logic behind it, but tech-wise it was incredible, we just needed the placeholder on the website where the customer could put the voucher and that's all tech requirements, so that has to call Voucherify API to validate and then the redemption takes place in the page that we specified and that was it. The rest it was work from the product manager and myself, like thinking about the logic, also learning how to use the tool, the fact that Voucherify gives so many options, so much freedom, it also means that you have to learn a little bit how it works, for me, for example, one lesson from the referral program or using standalone code is the fact that I included zero in capital letters, sorry o in capital letters and zero and that created some problems with customer service with codes when people didn't know if it was an O or 0 so if I was to redo the referral program or the codes, always leave out certain letters so there's no confusion there. We should make it bolder in our campaign manager too or perhaps this should be a default option.
Yeah, it's crazy that you even have that option in Voucherify, it's like I wouldn't have imagined, so yeah flexibility-wise it is really good. I hope this doesn't sound too promotional but I'm obviously a happy customer. To me that's a perfect way to conclude our webinar, so now I'd like to move to the Q&A session if anybody wants to ask me or Victor something then just use our chat or you can try to ask Hopin to share your mic and ask it on air, so to say, so let's wait um a minute. Mike, there's a question, I think it's more for you. Okay, let me address that – do you think the trend of mindful consumption (will reduce the need for promotions?) Well that's a tricky question, I don't know how to answer it just on top of my head, well when I see companies like Shein or Pomelo which is actually our customer and when take a look closely at their traffic and the volume of their sales it's pretty far from mindful consumption, so I guess it's not the case or at least the trend doesn't look like like a mindful consumption.
If I may Mike, at JustEat we did the customer research to see what people thought about our competitors and people were saying that drivers are not paid well enough and then we asked them "would you be willing to pay 5 Euro per delivery instead of 2 Euro?" and they all said no, so in the end, there's like this duality that people are becoming mindful and sustainable, very responsible, but at the same time price is a very strong incentive. I think it's going to be become wider, that group of people that are mindful, but the big current I think it pushes towards price, I can see it in the energy industry, the energy we're serving is the same as with another supplier, the energy is the same, so really the big differentiator is price. That's what I see and I guess this relates to promotions and discounts but when it comes to loyalty I guess it can come hand-in-hand, right? So okay we have another question, actually, it's a reply to the previous question. That's very true. Are there any other questions? Right, if not then I'd like to thank you, Victor, for being with me today.
Thank you, this was a really nice lesson on promotions across consumer business, different categories, because JustEat and OVO are different but it seems like promotions can be a universal tool for both of these businesses. Thank you all for coming and I invite you to visit our website to learn more. Thanks for having me, Mike. Thanks, everyone. Bye.
2021-11-06 21:46
