MarTech Interview with Rich Donahue, Chief Marketing Officer at Ibotta

What can brands do to drive customer loyalty programs more rigorously? Rich Donahue, Chief Marketing Officer at Ibotta has some tips:

 

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Welcome to this MarTech Series chat, Rich, tell us about yourself and your journey as CMO at Ibotta

My journey at Ibotta started 10 years ago, when I left KraftHeinz (formerly H.J. Heinz), where I worked in Brand Management across both their consumer products and food service divisions to come over to Ibotta.  I was drawn to the mobile aspect of the Ibotta app and how it was looking to drive engagement for CPGs with a younger audience. Ibotta was, in many ways, doing what we were trying to do as a brand ourselves, and that resonated with me. As Ibotta grew, my roles and responsibilities increased – and we built out the marketing team and helped Ibotta get to where it is today, the nation’s leading cash back rewards platform.

Over the years, I’ve had the opportunity to work with them on a number of fun and innovative programs, especially as we navigated the pandemic, a remote work environment, and the brand “growing up.” From our “Here to Help” program, aiding individuals in adapting to pandemic-related challenges, to the hugely successful “Free Thanksgiving” initiative where we provide free Thanksgiving meals to Ibotta Savers (10 million free Thanksgiving meals provided in the last three years), we’ve been able to put together a number of programs that have “done well by doing good,” which is exceptionally rewarding.

Throughout my time at Ibotta, I’ve focused on measurable results while fostering a culture of bold thinking, especially when it comes to how we grow and who we partner with. This has helped to grow our company’s brand recognition and reach new audiences with our unique message as well as our recent sponsorships. For example, this year we announced a new brand sponsorship with Formula 1 driver Logan Sargeant during his debut season, growing Ibotta’s reach to a new, passionate audience of potential users. This is the second sports-focused collaboration for Ibotta, as we also sponsor the NBA’s New Orleans Pelicans.

While Ibotta has gained recognition as a leading cash back rewards platform for consumers, we embarked on a new B2B venture last year with the formal launch of the Ibotta Performance Network (IPN). The IPN reaches 120 million shoppers across retail and third party publishers with its pay-per-sale model, offering unprecedented scale for a performance marketing platform. To further this growth and help get this message out, we reorganized the team to allow us to focus on growing our D2C business, building our B2B business, and solidifying the Ibotta brand.

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We’d love to hear about the evolution of the Ibotta platform and how it benefits end users?

Our mission at Ibotta is to make every purchase rewarding. By focusing on providing value for consumers in every purchase, we’ve been able to grow our total audience to over 50 million downloads of our app.

In the early days, our Savers shopped for groceries and submitted their receipts to get cash on item-level offers at the grocery store. As we grew our relationship with retailers, we were able to partner to allow for a seamless redemption (no receipt needed), which allowed for us to incorporate online grocery as well.

As we grew our grocery presence, other retailers looked to us to help drive sales at their stores, and we partnered with them to drive sales for non-grocery goods from household items to electronics, travel and more. Over 3,000 retailers now work with us to drive efficient incremental sales for their brands. While this furthered our mission, our offering was majority app based, and we realized that consumers were still shopping a ton from their desktops and online. We subsequently built out our desktop presence – both web and browser extension – and we made it easier than ever to not only get cash back online.

With our browser extension, we created the go-to tool for finding the lowest cost for products online on whatever you were buying. However, even with over $1.4 billion in cash back credited to our users, our work is not done, as our real goal is to give out more than $1 billion each year in the future.

When it comes to building brand loyalty today, what are some of the key practices you feel brands don’t do enough of?

Building brand loyalty today is more important than ever as we navigate a tough economic climate that is creating swirl in the market. Consumers are being more mindful of their spend, on every category, both discretionary and non-discretionary, and switching behaviors are more prevalent than ever.

That means that a consumer’s loyalty is up for grabs as they look for ways to stretch their budget. We see that for many manufacturers, sales volume is flat or declining, so engaging their loyal shoppers and winning back lapsed shoppers will be critical for brands in the months (or even years) ahead. We continue to believe that cutting consumers in on the deal is one of the most measurable and impactful ways to smartly drive their business forward.

Within this tumultuous macro landscape, many brands who have their own loyalty programs (many centered around subscriptions) or rewards programs are finding them increasingly expensive to maintain and fund, and have made changes to their programs as a result. These changes have generally meant shoppers have to spend more to receive perks, and they are noticing. It’s understandable that brands occasionally need to make changes to their programs and policies, but it’s extremely important to communicate the changes in a clear, digestible way, and to ensure that consumers have continued ways to engage.

How can well-structured loyalty programs drive benefits for end users in your view?

Well-structured loyalty programs are powered by strong segmentation. At the very minimum you need to understand who is most engaged and where a shopper is in their journey. It’s always more costly to get a new customer than retain one, but you can’t forget about your most loyal folks because they notice when the relationship becomes one-sided.

In an ideal scenario, you’re incentivizing shoppers in ways that feel personal and beneficial for them, so that they return to your business to purchase goods or services – and ultimately become advocates for your brand and products. Creating a level of consistency also means you’re able to help them form a beneficial habit and make your product an essential they can’t do without. Finally, offering other, exclusive perks makes the customer feel valued so they feel like they’re getting a deal before everyone else.

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Take us through some of the better performing loyalty programs you’ve seen in the industry and what key takeaways one can learn from them?

Any program where brands can create a virtuous cycle, or stored value, stands out. Starbucks is often referenced as a standout with their rewards program, and for good reason. They got consumers to load value into their program, which gave Starbucks a built-in advantage. Consumers know they have “value (dollars) ready to use,” and that stored value creates both increased frequency and loyalty. Add on the perks for use, and you’ve got a rewards program that provides value for the retailer and the consumer.

Other rewards programs would do well to drive stored value. A selfish plug, this is a big reason why the Ibotta Performance Network has seen such strong consideration and use from our partners. We’re creating rewards that drive value back into the retailer as the consumer earns cash back via stored value. When you have money to spend at a location, it jumps to the top of your consideration set, and that “free money” sitting in your account makes it that much easier to splurge on an extra item or three, boosting their total basket size. Consumers feel rewarded on every trip, and retailers continue to build loyalty, for free. Everyone wins!