September 13, 2024 • 23 mins
Join Matt Roche, CEO of EXTOLE, as he shares the frustrations with digital marketing that inspired the creation of a platform freeing brands from reliance on Google and Amazon. Learn how EXTOLE integrates with Shopify and Salesforce, turning loyal customers into powerful brand advocates through seamless referral and ambassador programs. In conversation with Melissa Minkow, Matt explores the power of authentic customer referrals, ethical tracking via QR codes, and the role of rewards in customer retention. Packed with insights, this episode reveals how to drive growth and loyalty through customer-led marketing strategies.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:21):
Hi, my name is Melissa Minco.
I am the Director of RetailStrategy at Digital Consultancy
CINT.
Joining me today, I have theCEO of XTOL to talk about
customer-led growth.
Matt Roach, Thanks for beinghere.
Speaker 2 (00:36):
It's a pleasure to be here, Melissa.
Thank you.
Speaker 1 (00:38):
Yeah, excited to get into this conversation.
To kick things off, let's justtalk about how XTOL came to be.
What's the origin story of XTOL?
Speaker 2 (00:47):
oh, I really love this.
The uh.
My team was very early on inthe early 2000s.
We did a company calledOffermatica and Offermatica was
one of the early landing pageoptimization companies, and so
we spent a lot of time trying toimprove the performance of paid
media, essentially so mediathat at the time people were
buying through Google.
(01:07):
And there were these momentswhere we would go into the
customer and say we improvedyour landing pages by like 20%,
you're getting all this extrarevenue.
We're really excited.
And the first thing they saidto us is like great, now we can
spend more money with Google.
And your heart sinks in yourchest and you're like, ah.
And you just your heart sinksin your chest and you're like,
ah.
And so once I got over theself-pity part of it, I realized
(01:28):
, oh my God, this isn't just myproblem, this is their problem.
Right Right Now I'm looking,I'm saying, oh my God, as these,
if these guys can control theflow of money, then they're no
different than someone who likeimagine there's only one bridge
between you and your customerand this guy is the guard at the
bridge and he says if you wantto cross the bridge to go to
(01:49):
your customer, you're going tohave to give me 30% of what's in
your cart.
You're like no, and they'relike fine, don't go to your
customer Right.
And so what was irritating tome was life-threatening to these
marketers.
And so we decided to do afterOffermatic, which is now Adobe
Target.
After we did this, we said howdo we provide a marketing
(02:11):
approach, a way of gatheringcustomers that doesn't require
us to pay the gatekeeper and paythe toll taker, whichever you
want to call them?
And we came up with theapproach Stolas taken, which is
to go to your customer base andsay, instead of paying some
random guy who's holding me forransom, why don't I actually
reward my customers for doingwhat, frankly, they've been
(02:35):
doing the whole time?
Because, if we think about it,do you really think Google's
creating all the purchases forbirdies?
Do you really think they'recreating all the purchases for
literally 90% of what you'redoing?
Like they're not telling youwhat book to read, what car to
drive, what clothes to wear,what shoes to wear, where to go
to restaurants.
Your friends are doing it andyet they're collecting 30, 40.
(02:58):
In the case of Amazon, right now, if you're selling through
Amazon and you want a listing inthe top set of results.
You are paying 50%.
50% of what that end customeris paying is going to Amazon to
just show up at that position inthe listing and along the way
it's screwing the customerbecause that's usually not even
the best deal.
And so what we wanted to do isto provide a way, sort of almost
(03:20):
mission-driven to say how canwe connect with the people who
actually care about our products, actually love our products?
And you turn it from a kind ofword of mouth let's hope it
happens organically into a realdiscipline, numbers driven way
of marketing.
Speaker 1 (03:39):
Love it.
So you've just kind ofdescribed it as a service At a
product level or at like a moretechnical level.
What technology products areyou providing your customers
then?
Speaker 2 (03:51):
Okay.
So Extol is a platform.
Extol plugs into your retailplatform like a Shopify.
It plugs into Salesforce, itplugs into a wide range of
back-end platforms to basicallycollect information about your
customer's journey and then tobe able to present offers in
front of them.
So we could put it onto webpages, into mobile, out through
(04:12):
email and SMS to basically sayhey, listen, if you refer a
friend, we'll give you a rewardand the other person will get a
reward.
Or if you're an ambassador at aathleisure company, if you talk
about this to your yoga classand they come in and buy with
your code, they'll get adiscount and you'll be
(04:33):
recognized as one of ourambassadors.
So it is different ways ofpromoting programs, of
delivering the program, theactual screens where people fill
things in, managing all thoselinks and codes and then
rewarding and probably moreimportantly, not rewarding
people, because sending out giftcards is easy.
Deciding when not to send agift card to someone is a harder
(04:55):
problem.
But it's all that and so thatyou can manage it without it
crushing you.
Speaker 1 (05:02):
That's great and I feel like, in today's
omni-channel world, bridgingthat gap and making sure that
the attribution is correct andthat you're really tracing where
they're discovering thesebrands, it's really tricky and
that's kind of the milliondollar question for a lot of
retailers.
So you said you provide like aunique code, a discount code or
something like that.
Does that kind of bridge thatgap then, so you can trace it?
Speaker 2 (05:30):
Yeah, and it's funny how it's morphed.
It started out as links, itstarted becoming codes, now more
and more often it's QR codes,because what I want to do is
I'll say, oh, I'll just show youmy phone and you'll take a
picture of it, and now I've madethe connection and so how it
changes over time.
And, frankly, where we want itto go is if you're sitting in a
branch with a bank or you'resitting in a retail store and
you say, and they say how didyou find out about us?
You don't say a website, googlesearch, right?
(05:50):
Oh, great, you know.
Like you say, oh, melissa, andwe go.
You know what we're going tothank Melissa.
All right, that we are actuallyas a company, we are going to
use our resources to find thesegreat people who've been doing
it.
One of my favorite conversationsthat happens with customers is
when they and this startedhappening in the edu space, like
(06:11):
the online universities yeahand they would say you know, 98
of our customers are, arereferred, and I'm like you know
that makes sense, like who'sgoing to go pay for online
education that you find onrandositecom, right?
And then they're like well, doyou know who referred them?
Are you nurturing these people?
Are you recognizing them?
(06:32):
Are you having a party for them?
Like if you actually knew thatthere was a group of people who
were affirmatively driving yourbrand?
Does it feel like the rightapproach is to just ignore them?
Speaker 1 (06:43):
right?
Yeah, it's a great point andyou mentioned you know you're
collecting all this data onthese customers.
What does that footprint looklike?
Is it solely their social mediabehavior?
Is it search engine browsingbehaviors?
What information do you collect?
Speaker 2 (06:59):
It's really interesting we are doing, we're
not.
We don't reach out into socialmedia, so all of our programs
are driven by campaigns that arecreated inside of our platform,
so we're not looking and sayingoh, you mentioned us on Twitter
.
There are social listeningplatforms.
They're fantastic.
We partner with them.
Ours are all sort of verydeliberate, Like I'm going to
ask you to do something likerefer, be an ambassador.
(07:22):
You know, one of the favoriteones over Christmas is ask
somebody to buy something foryou.
Love that.
I'll drop a hint.
But it's like oh, this is cool,I can't afford it.
It's weird.
My daughter really likes this.
Or there's even a grandparentsone that we're starting to do,
which is ask your kid what theyactually want.
Speaker 1 (07:41):
I'm thinking all my friends who send you know their
boyfriends an engagement ring.
Speaker 2 (07:45):
Yes, this is what I want.
That is a referral.
That is that is Exactly.
So that's, it is trying tostimulate this kind of behavior
so that we can track it andrecognize it.
The tracks that are left areyou know, everything is
permissioned, everything has isopted in.
We do nothing that is behindthe scenes, unless someone opts
(08:06):
in.
So then when someone comes inand says, oh, you dropped a hint
to buy this and come in, well,obviously we're maintaining that
relationship because we want togive you a reward.
But what we can start seeing islike oh, there are certain
people who drive, you know, Irefer to Melissa, and Melissa
refers to Sarah, and Sarahrefers to Robert, and suddenly
you get these chains of people.
Speaker 1 (08:29):
Well, that means either me or Melissa is a much
better customer than a normalcustomer and right now you don't
know.
Speaker 2 (08:34):
You don't know who Melissa is, other than a walking
credit.
Speaker 1 (08:37):
Yeah, that's a great point, and I remember when we
spoke a little bit about all ofthis in our prep call, we talked
about how, in grad school, Iwas told by some professors that
what made Paul Revere get theword out so effectively was that
he is what's called a broker ofinformation.
He had a really extensivenetwork.
So what does your relationshiplook like with those kind of
(09:00):
hyper-social, hyper-connectedconsumers who have a really wide
network?
Speaker 2 (09:06):
This is a great question because it draws into
attention that there's thisworld of like referral marketing
and then influencer marketing.
Speaker 1 (09:14):
Yeah.
Speaker 2 (09:14):
And the way it's thought about now is like
referral marketing is like yourcustomers and authentic and
they're small and they're kindof cute, like bunnies, you know,
but if there's enough of themthey'll make money.
And then influencers is like ohokay, these are the, I'm going
to go onto an influencer networkand I'm going to rent them for
a tweet or I'm going to givethem some sort of affiliate
payment.
The thing that it ignores ishow all the kind of the spectrum
(09:39):
that happens.
So there are influencers thatare commercial, you know, like
entities like you pay them tosay something right, nothing
wrong with that, not really ourbusiness.
What we're trying to do, wecall it ambassadors, and an
(10:02):
ambassador is an influencer thatactually likes your product
right, which means they probablybought it, and so sampling is
important and you know there'sall sorts of really great stuff
around influencer marketing thatagain, we have partners who can
do that, that sort of hey, lookinto my big database and I'll
find you someone who appeals tothe kind of customer you're
reaching.
What I want to do is say youknow, if I get a hundred
thousand advocates, I'm prettysure that about 200 of them are
going to become super advocatesand maybe 100 of them are going
to become ambassadors.
(10:23):
The ambassadors, the sum totalof revenue that they'll deliver
will be equal to all the revenuedriven by all of the normal
referrers.
You'll get roughly 50-50 out ofthis, but you have to actually
nurture them and develop them.
You have to say, hey, youreferred once, do it again and
we'll give you this thing.
It's like, wow, you've broughtthree customers in, you're now
an ambassador.
(10:43):
You get a different program youmay get.
You know, under normalcircumstances we would never
send more than $600 of rewardsto someone because you have to
send out tax forms and it's justa hassle.
But if someone has done 600 andI reach out to them and they're
like, yeah, I love yourproducts, then we'll say, fine,
here's a 1099.
(11:04):
Yeah, let's party, we can dosomething together.
That could be fun.
And what you'll learn about itis they end up being people that
represent something.
They are doctors, they arenurses, they are students, they
are, you know, like there are.
There are campus influencers,right, and those are very, very
difficult and very expensive tofind in the wild, but they're
(11:25):
sitting there inside yourcustomer base.
Speaker 1 (11:28):
Right.
So they're kind of like theKOLs that's kind of what they
refer to them, as in Asia forlive streaming.
It's like they're knowledgeleaders.
They're kind of experts intheir space but very organically
, but they're trusted.
Yes.
Speaker 2 (11:42):
It literally could be your sister or cousin or best
friend from college.
It's like that's the thing wewant them to be, something we
want them to look a certain wayand we want it to be, but in
reality, the people who are goodat influencing people are
people who are good atinfluencing people and they look
all sorts of different ways.
Speaker 1 (12:03):
Real people yeah.
Speaker 2 (12:04):
It turns out, they're actually mostly real people.
Speaker 1 (12:06):
Right, relatable, yeah, that's literally what I
love.
Speaker 2 (12:11):
Whole business is built around people.
Speaker 1 (12:14):
That's so fun.
Whole business is built aroundpeople.
Speaker 2 (12:16):
That's so fun.
It's not like you know.
We're just taking the labor outof it.
So to make sure that you canget actually closer and closer
and closer and closer to yourcustomer and not just in a what
do you want to buy next?
But this other part, which islike too much of our
relationship with customers, isaround again.
As I said, a walking creditcard.
What can you spend?
What can you buy?
Buy more, buy more, buy more asopposed to hey, have you ever
visited one of our branches?
(12:38):
Why don't you come by?
Why don't you come into thestore?
Why don't you bring a friendinto a store?
We had one with a bank that wasopening coffee shops in their
branches.
We're like bring a friend andwe'll buy you coffee.
Speaker 1 (12:51):
That's awesome.
Speaker 2 (12:52):
So you're just saying well, that seems human and
normal, like friends and coffee,and it's not deceitful Like
they have a coffee shop.
Let's just do things the waynormal humans do them.
Find is the benefit All this iswhen you treat your customers
well you will have a healthiercustomer base, and when a
healthier customer base meansthey're going to spend more over
(13:14):
time and they're going to staylonger, and they're going to be
happier with what you do.
I mean, what's amazing to me isthe simple act of having come
through referral will makesomebody 20% more profitable
over their lifetime.
Wow, regardless of sector, theact of recommending will make
you 20%.
Speaker 1 (13:32):
Wow, that's a really important data point.
I want to like double click onthat for the listeners.
Can you say that one more time?
Just because that's huge.
Speaker 2 (13:39):
The act of coming of, of being a participant in one
of these programs where we'rereferring and advocating whether
you're the advocate or thefriend, you will be 1.2 or 20
more valuable over the customerlife cycle than someone who came
in through a search, a productad, an link or just came to your
brand.
Speaker 1 (14:00):
That's awesome.
Speaker 2 (14:01):
Yeah, that makes a lot of sense, the simple way I
say it is like how you enter ishow you're going to leave.
Why would you have a greeter ata Walmart?
You don't really need a greeterat a Walmart.
It's not that hard to navigate.
You walk in and if the firstthing you feel is human, then
when you're done, that is goingto echo and reverberate through
(14:22):
your whole experience.
Speaker 1 (14:23):
Right.
Speaker 2 (14:24):
If it starts in a human way, it will end in a
human way, and you can look atcynically and say well, we're
going to pretend to be humans sothat we can make more money out
of it.
But what if you just treatedthem like humans and, as a
result, you had a longer, betterrelationship with Right, there
it is.
I'm crazy.
Speaker 1 (14:43):
No, but that's what happens.
Right Is brands forget that, sothat's really fantastic.
Speaker 2 (14:48):
So I don't.
This is, you know, to the CMOsor the VPs of marketing who are
like, listen, this is all great,I have to deliver a certain
amount of acquisition.
What I will say is, if you arenot demanding 10% minimum of
your customer acquisition comingthrough customer-led growth,
then you are just overpaying formarketing.
(15:09):
You are not going to continueto be able to afford 30% of your
net sales going to media, soyou're going to have to find a
lower cost, higher value part ofmarketing so that you can
afford it.
If you think that advertisingis going to be the core of your
marketing, you're not going tobe able to afford it, and so
this is a brass tax no bullshit,measurable way of driving
(15:33):
marketing.
It just happens to have theadded benefit of being human.
Speaker 1 (15:37):
Right, that's another fantastic point.
So you've kind of touched onhow you interact with the end
consumers, that you want toprovide those kind of referrals.
How does your day to day panout with these retailers then?
Who are the stakeholders you'retalking to first and foremost
at the retailers, and what areyou saying to them?
Speaker 2 (15:55):
Great question.
This is the dilemma and theopportunity for us.
There are two types ofretailers, two types of retail
marketing roles that areaffected by this.
One is the acquisition people,who tend to be affiliate, paid
search, media.
Right, they have a goal of acertain number of customers to
(16:16):
be brought in, a certain revenueand a budget to spend together.
We have to work with thembecause we are a key acquisition
source and so, once again, ifyou are an acquisition marketing
and the pie chart that you'reshowing at your weekly or
monthly review doesn't have asliver for this, then you're
just wasting money, and just asflat out as that.
The other is the retention Sendout emails on a thoughtful
(16:41):
cadence to your customers,hopefully targeted, hopefully
using really sensitivepersonalization, etc.
So that they come back and youhave higher long-term growth.
So that's higher long-termvalue, more frequency, and so
that group, the opportunity forthem is to say, hey, listen, I
can get more value out of myexisting customers, especially
(17:04):
when they're not ready to buyanother thing, because if
someone's not ready to buy, theymight be ready to do yeah.
Does that make sense.
Speaker 1 (17:11):
Totally.
That's a great point, and isevery brand.
Oh, what were you going to sayAbout mattresses or cars?
Speaker 2 (17:18):
How often do you buy a mattress?
Speaker 1 (17:20):
Right, yeah, exactly Every decade.
Speaker 2 (17:23):
Yeah how many emails are you going to get from a
mattress person before you'relike delete you know, but
mattress the people who sellmattresses online tend to have
amazing programs, because onething you can do after you've
bought a mattress is you cantell someone.
Speaker 1 (17:37):
Right, that's actually a perfect segue,
because I was going to ask youare there certain types of
brands or categories of brandsthat lend themselves better to
being an X toll client, or is itjust everybody would make a
great client?
Speaker 2 (17:51):
If you can market, you can do customer led growth
Awesome, right, if there is amarket for your product this is
just a channel to reach thatmarket.
If you don't go, market likereferral tends not to be a great
last ditch my brand is dying,let's see what I can do.
It doesn't work.
But if you can market throughother forms, you can market
(18:12):
through referral.
So what makes someone good orless good at it is this is
funnel marketing 101.
It's just, you have two funnels, unlike your other form of
marketing where you'd say, well,I'm buying a keyword, they're
landing and I have to convertthem.
You say, well, the first thing Ineed to do is convert advocates
(18:32):
.
So I have to figure out how amI going to reach them through my
existing assets my email list,sms, social media presence, the
site mobile?
How do I reach them to tellthem this program exists?
And we have people putting iton statements, putting it on
flyers, so many things on boxes,catalogs.
And then, of all the people Ireach out to, how many of them
(18:52):
eventually become an advocate?
Right, that's my first funneland it's just like any other
funnel.
You'll know how to do it onceyou see it.
The second funnel is oncethere's been a share, that's
just marketing, like when Ishare, do people land?
When they land, do they visitand there's some nuance to it.
That's kind of fun where, ifyou're doing search type stuff,
you may say well, I want toreinforce what the message was
(19:15):
in the ad I want to reinforce, Iwant to target or personalize
the product, whereas when you'redoing this kind of social
funnel optimization, you want toreinforce the relationship.
So your landing page should sayhey, melissa thought that you
would like.
Right, so you're not just aretailer, you're Melissa's
(19:35):
retailer, and the more that youcan embrace that, then the
better your funnel will work.
Speaker 1 (19:40):
That's super interesting.
So we're coming up on time.
But one of the reasons I love Iknow crazy We've covered a lot
of bases One of the reasons Ilove talking to you is because
you're so specific withterminology.
You're very intentional, veryarticulate in that way and you
kind of differentiated a littlebit between recognition and
reward.
But you didn't really go intothe difference there at kind of
(20:02):
like a philosophical level.
For X tool, what's thedifference there?
Speaker 2 (20:07):
for customer led growth to work, and customer led
growth is driving yourmarketing from your customers
out to not from your media in.
For customer growth, you haveto motivate right, and so
there's.
There's three things you wantto think about.
Like classically, you'll thinkabout attribution.
Do I give credit to a program?
And that is like well, am Igoing to have to pay Google for
(20:30):
this?
Am I going to pay you for this?
And that's great.
You're going to have to dealwith attribution.
It's a forever problem.
Recognition is different.
Recognition says that even if Ihave to pay like if there's
some they clicked here and theyclicked here and they clicked on
the link you always pay yourcustomer.
You never said oh no, I'm sorry, you were last click or you
were first click, or I'm onlygiving you 50% because I did
(20:51):
another click.
You always pay them, and youalways pay them because you
always get it back that person.
When they get recognition,we'll spend more.
I've covered this one, right,yeah?
The third is the incentive part,which is saying you have to
like.
Part of the deal is you have togive them something right, and
what you don't want to do isthink about it as like oh well,
(21:13):
now I'm lowering my pricebecause I gave him a discount.
It's like no, this isequivalent to what you would
have spent at Amazon or Googleor Meta.
This is a marketing expense.
It may show up as a discount,but it's a marketing expense
because you're not paying Google.
What you're doing is you'reusing this to motivate somebody
and I think, honestly, rewardsare going to be the next phase
(21:33):
of branding, meaning how youchoose to reward somebody is a
reflection of who you are, and Ithink what we're going to see
as things become more motivated,more excuse me automated, is
the clever.
Rewards are going to bemotivating people.
Speaker 1 (21:49):
Yes.
Speaker 2 (21:50):
Think about it.
How does a presidentialcampaign give a reward to
someone who donates they?
Speaker 1 (21:56):
give you a sticker.
Speaker 2 (21:57):
They give you a hat, you know, and it says hey, I'm
not saying whichever yourcandidate is is written on that
map.
So what they're doing isthey're saying all of this is an
opportunity to reinforce mybrand, the message, what I stand
for.
I should be giving out a rewardto get for a month of free
(22:18):
clear to people who buy a travelbag, Because it's about that
experience.
And now you have this whole newpalette of marketing options
that just wasn't available for anight.
Speaker 1 (22:28):
It is yeah Well, listeners heard it here first.
Rewards are the next phase.
I think that's incrediblyimportant, especially because
you talked about it in thecontext of identity and that's
really habit building.
There's a lot of research onthat, where if you want people
to change their habits, you needthem to associate that new
habit with a sense of identity,and that's what a reward is
(22:48):
right.
It's playing into that sense ofidentity.
Speaker 2 (22:50):
It's an opportunity.
Speaker 1 (22:52):
Exactly.
Speaker 2 (22:52):
All these are opportunities, and I'm just
giving you another tool set touse that, coincidentally, could
give you 10% or more of youracquisition, so I think that's
kind of nice.
Speaker 1 (23:03):
Absolutely Well.
That's a perfect note to end on.
Is there anything we didn'tcover that you wanted to mention
?
Speaker 2 (23:11):
That's a great question.
No, I think this is a greatconversation, I think you did a
great job and I reallyappreciate the opportunity to
talk to this audience about it,because it's obviously something
I care a great deal about andit's something I want other
people to care a great dealabout.
Speaker 1 (23:25):
Totally Well.
Thanks so much for joining metoday.
Love the conversation.
Speaker 2 (23:29):
All right, thank you.
Hi, my name is Melissa Minco.
I am the Director of RetailStrategy at Digital Consultancy
CINT.
Joining me today, I have theCEO of XTOL to talk about
customer-led growth.
Matt Roach, Thanks for beinghere.
Speaker 2 (00:36):
It's a pleasure to be here, Melissa.
Thank you.
Speaker 1 (00:38):
Yeah, excited to get into this conversation.
To kick things off, let's justtalk about how XTOL came to be.
What's the origin story of XTOL?
Speaker 2 (00:47):
oh, I really love this.
The uh.
My team was very early on inthe early 2000s.
We did a company calledOffermatica and Offermatica was
one of the early landing pageoptimization companies, and so
we spent a lot of time trying toimprove the performance of paid
media, essentially so mediathat at the time people were
buying through Google.
(01:07):
And there were these momentswhere we would go into the
customer and say we improvedyour landing pages by like 20%,
you're getting all this extrarevenue.
We're really excited.
And the first thing they saidto us is like great, now we can
spend more money with Google.
And your heart sinks in yourchest and you're like, ah.
And you just your heart sinksin your chest and you're like,
ah.
And so once I got over theself-pity part of it, I realized
(01:28):
, oh my God, this isn't just myproblem, this is their problem.
Right Right Now I'm looking,I'm saying, oh my God, as these,
if these guys can control theflow of money, then they're no
different than someone who likeimagine there's only one bridge
between you and your customerand this guy is the guard at the
bridge and he says if you wantto cross the bridge to go to
(01:49):
your customer, you're going tohave to give me 30% of what's in
your cart.
You're like no, and they'relike fine, don't go to your
customer Right.
And so what was irritating tome was life-threatening to these
marketers.
And so we decided to do afterOffermatic, which is now Adobe
Target.
After we did this, we said howdo we provide a marketing
(02:11):
approach, a way of gatheringcustomers that doesn't require
us to pay the gatekeeper and paythe toll taker, whichever you
want to call them?
And we came up with theapproach Stolas taken, which is
to go to your customer base andsay, instead of paying some
random guy who's holding me forransom, why don't I actually
reward my customers for doingwhat, frankly, they've been
(02:35):
doing the whole time?
Because, if we think about it,do you really think Google's
creating all the purchases forbirdies?
Do you really think they'recreating all the purchases for
literally 90% of what you'redoing?
Like they're not telling youwhat book to read, what car to
drive, what clothes to wear,what shoes to wear, where to go
to restaurants.
Your friends are doing it andyet they're collecting 30, 40.
(02:58):
In the case of Amazon, right now, if you're selling through
Amazon and you want a listing inthe top set of results.
You are paying 50%.
50% of what that end customeris paying is going to Amazon to
just show up at that position inthe listing and along the way
it's screwing the customerbecause that's usually not even
the best deal.
And so what we wanted to do isto provide a way, sort of almost
(03:20):
mission-driven to say how canwe connect with the people who
actually care about our products, actually love our products?
And you turn it from a kind ofword of mouth let's hope it
happens organically into a realdiscipline, numbers driven way
of marketing.
Speaker 1 (03:39):
Love it.
So you've just kind ofdescribed it as a service At a
product level or at like a moretechnical level.
What technology products areyou providing your customers
then?
Speaker 2 (03:51):
Okay.
So Extol is a platform.
Extol plugs into your retailplatform like a Shopify.
It plugs into Salesforce, itplugs into a wide range of
back-end platforms to basicallycollect information about your
customer's journey and then tobe able to present offers in
front of them.
So we could put it onto webpages, into mobile, out through
(04:12):
email and SMS to basically sayhey, listen, if you refer a
friend, we'll give you a rewardand the other person will get a
reward.
Or if you're an ambassador at aathleisure company, if you talk
about this to your yoga classand they come in and buy with
your code, they'll get adiscount and you'll be
(04:33):
recognized as one of ourambassadors.
So it is different ways ofpromoting programs, of
delivering the program, theactual screens where people fill
things in, managing all thoselinks and codes and then
rewarding and probably moreimportantly, not rewarding
people, because sending out giftcards is easy.
Deciding when not to send agift card to someone is a harder
(04:55):
problem.
But it's all that and so thatyou can manage it without it
crushing you.
Speaker 1 (05:02):
That's great and I feel like, in today's
omni-channel world, bridgingthat gap and making sure that
the attribution is correct andthat you're really tracing where
they're discovering thesebrands, it's really tricky and
that's kind of the milliondollar question for a lot of
retailers.
So you said you provide like aunique code, a discount code or
something like that.
Does that kind of bridge thatgap then, so you can trace it?
Speaker 2 (05:30):
Yeah, and it's funny how it's morphed.
It started out as links, itstarted becoming codes, now more
and more often it's QR codes,because what I want to do is
I'll say, oh, I'll just show youmy phone and you'll take a
picture of it, and now I've madethe connection and so how it
changes over time.
And, frankly, where we want itto go is if you're sitting in a
branch with a bank or you'resitting in a retail store and
you say, and they say how didyou find out about us?
You don't say a website, googlesearch, right?
(05:50):
Oh, great, you know.
Like you say, oh, melissa, andwe go.
You know what we're going tothank Melissa.
All right, that we are actuallyas a company, we are going to
use our resources to find thesegreat people who've been doing
it.
One of my favorite conversationsthat happens with customers is
when they and this startedhappening in the edu space, like
(06:11):
the online universities yeahand they would say you know, 98
of our customers are, arereferred, and I'm like you know
that makes sense, like who'sgoing to go pay for online
education that you find onrandositecom, right?
And then they're like well, doyou know who referred them?
Are you nurturing these people?
Are you recognizing them?
(06:32):
Are you having a party for them?
Like if you actually knew thatthere was a group of people who
were affirmatively driving yourbrand?
Does it feel like the rightapproach is to just ignore them?
Speaker 1 (06:43):
right?
Yeah, it's a great point andyou mentioned you know you're
collecting all this data onthese customers.
What does that footprint looklike?
Is it solely their social mediabehavior?
Is it search engine browsingbehaviors?
What information do you collect?
Speaker 2 (06:59):
It's really interesting we are doing, we're
not.
We don't reach out into socialmedia, so all of our programs
are driven by campaigns that arecreated inside of our platform,
so we're not looking and sayingoh, you mentioned us on Twitter
.
There are social listeningplatforms.
They're fantastic.
We partner with them.
Ours are all sort of verydeliberate, Like I'm going to
ask you to do something likerefer, be an ambassador.
(07:22):
You know, one of the favoriteones over Christmas is ask
somebody to buy something foryou.
Love that.
I'll drop a hint.
But it's like oh, this is cool,I can't afford it.
It's weird.
My daughter really likes this.
Or there's even a grandparentsone that we're starting to do,
which is ask your kid what theyactually want.
Speaker 1 (07:41):
I'm thinking all my friends who send you know their
boyfriends an engagement ring.
Speaker 2 (07:45):
Yes, this is what I want.
That is a referral.
That is that is Exactly.
So that's, it is trying tostimulate this kind of behavior
so that we can track it andrecognize it.
The tracks that are left areyou know, everything is
permissioned, everything has isopted in.
We do nothing that is behindthe scenes, unless someone opts
(08:06):
in.
So then when someone comes inand says, oh, you dropped a hint
to buy this and come in, well,obviously we're maintaining that
relationship because we want togive you a reward.
But what we can start seeing islike oh, there are certain
people who drive, you know, Irefer to Melissa, and Melissa
refers to Sarah, and Sarahrefers to Robert, and suddenly
you get these chains of people.
Speaker 1 (08:29):
Well, that means either me or Melissa is a much
better customer than a normalcustomer and right now you don't
know.
Speaker 2 (08:34):
You don't know who Melissa is, other than a walking
credit.
Speaker 1 (08:37):
Yeah, that's a great point, and I remember when we
spoke a little bit about all ofthis in our prep call, we talked
about how, in grad school, Iwas told by some professors that
what made Paul Revere get theword out so effectively was that
he is what's called a broker ofinformation.
He had a really extensivenetwork.
So what does your relationshiplook like with those kind of
(09:00):
hyper-social, hyper-connectedconsumers who have a really wide
network?
Speaker 2 (09:06):
This is a great question because it draws into
attention that there's thisworld of like referral marketing
and then influencer marketing.
Speaker 1 (09:14):
Yeah.
Speaker 2 (09:14):
And the way it's thought about now is like
referral marketing is like yourcustomers and authentic and
they're small and they're kindof cute, like bunnies, you know,
but if there's enough of themthey'll make money.
And then influencers is like ohokay, these are the, I'm going
to go onto an influencer networkand I'm going to rent them for
a tweet or I'm going to givethem some sort of affiliate
payment.
The thing that it ignores ishow all the kind of the spectrum
(09:39):
that happens.
So there are influencers thatare commercial, you know, like
entities like you pay them tosay something right, nothing
wrong with that, not really ourbusiness.
What we're trying to do, wecall it ambassadors, and an
(10:02):
ambassador is an influencer thatactually likes your product
right, which means they probablybought it, and so sampling is
important and you know there'sall sorts of really great stuff
around influencer marketing thatagain, we have partners who can
do that, that sort of hey, lookinto my big database and I'll
find you someone who appeals tothe kind of customer you're
reaching.
What I want to do is say youknow, if I get a hundred
thousand advocates, I'm prettysure that about 200 of them are
going to become super advocatesand maybe 100 of them are going
to become ambassadors.
(10:23):
The ambassadors, the sum totalof revenue that they'll deliver
will be equal to all the revenuedriven by all of the normal
referrers.
You'll get roughly 50-50 out ofthis, but you have to actually
nurture them and develop them.
You have to say, hey, youreferred once, do it again and
we'll give you this thing.
It's like, wow, you've broughtthree customers in, you're now
an ambassador.
(10:43):
You get a different program youmay get.
You know, under normalcircumstances we would never
send more than $600 of rewardsto someone because you have to
send out tax forms and it's justa hassle.
But if someone has done 600 andI reach out to them and they're
like, yeah, I love yourproducts, then we'll say, fine,
here's a 1099.
(11:04):
Yeah, let's party, we can dosomething together.
That could be fun.
And what you'll learn about itis they end up being people that
represent something.
They are doctors, they arenurses, they are students, they
are, you know, like there are.
There are campus influencers,right, and those are very, very
difficult and very expensive tofind in the wild, but they're
(11:25):
sitting there inside yourcustomer base.
Speaker 1 (11:28):
Right.
So they're kind of like theKOLs that's kind of what they
refer to them, as in Asia forlive streaming.
It's like they're knowledgeleaders.
They're kind of experts intheir space but very organically
, but they're trusted.
Yes.
Speaker 2 (11:42):
It literally could be your sister or cousin or best
friend from college.
It's like that's the thing wewant them to be, something we
want them to look a certain wayand we want it to be, but in
reality, the people who are goodat influencing people are
people who are good atinfluencing people and they look
all sorts of different ways.
Speaker 1 (12:03):
Real people yeah.
Speaker 2 (12:04):
It turns out, they're actually mostly real people.
Speaker 1 (12:06):
Right, relatable, yeah, that's literally what I
love.
Speaker 2 (12:11):
Whole business is built around people.
Speaker 1 (12:14):
That's so fun.
Whole business is built aroundpeople.
Speaker 2 (12:16):
That's so fun.
It's not like you know.
We're just taking the labor outof it.
So to make sure that you canget actually closer and closer
and closer and closer to yourcustomer and not just in a what
do you want to buy next?
But this other part, which islike too much of our
relationship with customers, isaround again.
As I said, a walking creditcard.
What can you spend?
What can you buy?
Buy more, buy more, buy more asopposed to hey, have you ever
visited one of our branches?
(12:38):
Why don't you come by?
Why don't you come into thestore?
Why don't you bring a friendinto a store?
We had one with a bank that wasopening coffee shops in their
branches.
We're like bring a friend andwe'll buy you coffee.
Speaker 1 (12:51):
That's awesome.
Speaker 2 (12:52):
So you're just saying well, that seems human and
normal, like friends and coffee,and it's not deceitful Like
they have a coffee shop.
Let's just do things the waynormal humans do them.
Find is the benefit All this iswhen you treat your customers
well you will have a healthiercustomer base, and when a
healthier customer base meansthey're going to spend more over
(13:14):
time and they're going to staylonger, and they're going to be
happier with what you do.
I mean, what's amazing to me isthe simple act of having come
through referral will makesomebody 20% more profitable
over their lifetime.
Wow, regardless of sector, theact of recommending will make
you 20%.
Speaker 1 (13:32):
Wow, that's a really important data point.
I want to like double click onthat for the listeners.
Can you say that one more time?
Just because that's huge.
Speaker 2 (13:39):
The act of coming of, of being a participant in one
of these programs where we'rereferring and advocating whether
you're the advocate or thefriend, you will be 1.2 or 20
more valuable over the customerlife cycle than someone who came
in through a search, a productad, an link or just came to your
brand.
Speaker 1 (14:00):
That's awesome.
Speaker 2 (14:01):
Yeah, that makes a lot of sense, the simple way I
say it is like how you enter ishow you're going to leave.
Why would you have a greeter ata Walmart?
You don't really need a greeterat a Walmart.
It's not that hard to navigate.
You walk in and if the firstthing you feel is human, then
when you're done, that is goingto echo and reverberate through
(14:22):
your whole experience.
Speaker 1 (14:23):
Right.
Speaker 2 (14:24):
If it starts in a human way, it will end in a
human way, and you can look atcynically and say well, we're
going to pretend to be humans sothat we can make more money out
of it.
But what if you just treatedthem like humans and, as a
result, you had a longer, betterrelationship with Right, there
it is.
I'm crazy.
Speaker 1 (14:43):
No, but that's what happens.
Right Is brands forget that, sothat's really fantastic.
Speaker 2 (14:48):
So I don't.
This is, you know, to the CMOsor the VPs of marketing who are
like, listen, this is all great,I have to deliver a certain
amount of acquisition.
What I will say is, if you arenot demanding 10% minimum of
your customer acquisition comingthrough customer-led growth,
then you are just overpaying formarketing.
(15:09):
You are not going to continueto be able to afford 30% of your
net sales going to media, soyou're going to have to find a
lower cost, higher value part ofmarketing so that you can
afford it.
If you think that advertisingis going to be the core of your
marketing, you're not going tobe able to afford it, and so
this is a brass tax no bullshit,measurable way of driving
(15:33):
marketing.
It just happens to have theadded benefit of being human.
Speaker 1 (15:37):
Right, that's another fantastic point.
So you've kind of touched onhow you interact with the end
consumers, that you want toprovide those kind of referrals.
How does your day to day panout with these retailers then?
Who are the stakeholders you'retalking to first and foremost
at the retailers, and what areyou saying to them?
Speaker 2 (15:55):
Great question.
This is the dilemma and theopportunity for us.
There are two types ofretailers, two types of retail
marketing roles that areaffected by this.
One is the acquisition people,who tend to be affiliate, paid
search, media.
Right, they have a goal of acertain number of customers to
(16:16):
be brought in, a certain revenueand a budget to spend together.
We have to work with thembecause we are a key acquisition
source and so, once again, ifyou are an acquisition marketing
and the pie chart that you'reshowing at your weekly or
monthly review doesn't have asliver for this, then you're
just wasting money, and just asflat out as that.
The other is the retention Sendout emails on a thoughtful
(16:41):
cadence to your customers,hopefully targeted, hopefully
using really sensitivepersonalization, etc.
So that they come back and youhave higher long-term growth.
So that's higher long-termvalue, more frequency, and so
that group, the opportunity forthem is to say, hey, listen, I
can get more value out of myexisting customers, especially
(17:04):
when they're not ready to buyanother thing, because if
someone's not ready to buy, theymight be ready to do yeah.
Does that make sense.
Speaker 1 (17:11):
Totally.
That's a great point, and isevery brand.
Oh, what were you going to sayAbout mattresses or cars?
Speaker 2 (17:18):
How often do you buy a mattress?
Speaker 1 (17:20):
Right, yeah, exactly Every decade.
Speaker 2 (17:23):
Yeah how many emails are you going to get from a
mattress person before you'relike delete you know, but
mattress the people who sellmattresses online tend to have
amazing programs, because onething you can do after you've
bought a mattress is you cantell someone.
Speaker 1 (17:37):
Right, that's actually a perfect segue,
because I was going to ask youare there certain types of
brands or categories of brandsthat lend themselves better to
being an X toll client, or is itjust everybody would make a
great client?
Speaker 2 (17:51):
If you can market, you can do customer led growth
Awesome, right, if there is amarket for your product this is
just a channel to reach thatmarket.
If you don't go, market likereferral tends not to be a great
last ditch my brand is dying,let's see what I can do.
It doesn't work.
But if you can market throughother forms, you can market
(18:12):
through referral.
So what makes someone good orless good at it is this is
funnel marketing 101.
It's just, you have two funnels, unlike your other form of
marketing where you'd say, well,I'm buying a keyword, they're
landing and I have to convertthem.
You say, well, the first thing Ineed to do is convert advocates
(18:32):
.
So I have to figure out how amI going to reach them through my
existing assets my email list,sms, social media presence, the
site mobile?
How do I reach them to tellthem this program exists?
And we have people putting iton statements, putting it on
flyers, so many things on boxes,catalogs.
And then, of all the people Ireach out to, how many of them
(18:52):
eventually become an advocate?
Right, that's my first funneland it's just like any other
funnel.
You'll know how to do it onceyou see it.
The second funnel is oncethere's been a share, that's
just marketing, like when Ishare, do people land?
When they land, do they visitand there's some nuance to it.
That's kind of fun where, ifyou're doing search type stuff,
you may say well, I want toreinforce what the message was
(19:15):
in the ad I want to reinforce, Iwant to target or personalize
the product, whereas when you'redoing this kind of social
funnel optimization, you want toreinforce the relationship.
So your landing page should sayhey, melissa thought that you
would like.
Right, so you're not just aretailer, you're Melissa's
(19:35):
retailer, and the more that youcan embrace that, then the
better your funnel will work.
Speaker 1 (19:40):
That's super interesting.
So we're coming up on time.
But one of the reasons I love Iknow crazy We've covered a lot
of bases One of the reasons Ilove talking to you is because
you're so specific withterminology.
You're very intentional, veryarticulate in that way and you
kind of differentiated a littlebit between recognition and
reward.
But you didn't really go intothe difference there at kind of
(20:02):
like a philosophical level.
For X tool, what's thedifference there?
Speaker 2 (20:07):
for customer led growth to work, and customer led
growth is driving yourmarketing from your customers
out to not from your media in.
For customer growth, you haveto motivate right, and so
there's.
There's three things you wantto think about.
Like classically, you'll thinkabout attribution.
Do I give credit to a program?
And that is like well, am Igoing to have to pay Google for
(20:30):
this?
Am I going to pay you for this?
And that's great.
You're going to have to dealwith attribution.
It's a forever problem.
Recognition is different.
Recognition says that even if Ihave to pay like if there's
some they clicked here and theyclicked here and they clicked on
the link you always pay yourcustomer.
You never said oh no, I'm sorry, you were last click or you
were first click, or I'm onlygiving you 50% because I did
(20:51):
another click.
You always pay them, and youalways pay them because you
always get it back that person.
When they get recognition,we'll spend more.
I've covered this one, right,yeah?
The third is the incentive part,which is saying you have to
like.
Part of the deal is you have togive them something right, and
what you don't want to do isthink about it as like oh well,
(21:13):
now I'm lowering my pricebecause I gave him a discount.
It's like no, this isequivalent to what you would
have spent at Amazon or Googleor Meta.
This is a marketing expense.
It may show up as a discount,but it's a marketing expense
because you're not paying Google.
What you're doing is you'reusing this to motivate somebody
and I think, honestly, rewardsare going to be the next phase
(21:33):
of branding, meaning how youchoose to reward somebody is a
reflection of who you are, and Ithink what we're going to see
as things become more motivated,more excuse me automated, is
the clever.
Rewards are going to bemotivating people.
Speaker 1 (21:49):
Yes.
Speaker 2 (21:50):
Think about it.
How does a presidentialcampaign give a reward to
someone who donates they?
Speaker 1 (21:56):
give you a sticker.
Speaker 2 (21:57):
They give you a hat, you know, and it says hey, I'm
not saying whichever yourcandidate is is written on that
map.
So what they're doing isthey're saying all of this is an
opportunity to reinforce mybrand, the message, what I stand
for.
I should be giving out a rewardto get for a month of free
(22:18):
clear to people who buy a travelbag, Because it's about that
experience.
And now you have this whole newpalette of marketing options
that just wasn't available for anight.
Speaker 1 (22:28):
It is yeah Well, listeners heard it here first.
Rewards are the next phase.
I think that's incrediblyimportant, especially because
you talked about it in thecontext of identity and that's
really habit building.
There's a lot of research onthat, where if you want people
to change their habits, you needthem to associate that new
habit with a sense of identity,and that's what a reward is
(22:48):
right.
It's playing into that sense ofidentity.
Speaker 2 (22:50):
It's an opportunity.
Speaker 1 (22:52):
Exactly.
Speaker 2 (22:52):
All these are opportunities, and I'm just
giving you another tool set touse that, coincidentally, could
give you 10% or more of youracquisition, so I think that's
kind of nice.
Speaker 1 (23:03):
Absolutely Well.
That's a perfect note to end on.
Is there anything we didn'tcover that you wanted to mention
?
Speaker 2 (23:11):
That's a great question.
No, I think this is a greatconversation, I think you did a
great job and I reallyappreciate the opportunity to
talk to this audience about it,because it's obviously something
I care a great deal about andit's something I want other
people to care a great dealabout.
Speaker 1 (23:25):
Totally Well.
Thanks so much for joining metoday.
Love the conversation.
Speaker 2 (23:29):
All right, thank you.
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