Perhaps one of the keys to the success of Starbucks is their digital rewards experience. You pay with your phone, earn stars, get a free drink on your birthday, and the customers love it.
There are plenty of solutions out there for smaller businesses to compete, but they often require people to fumble through emails, QR codes, and obscure apps.
Ivan Matkovic, the founder and CEO of Spendgo is trying to fix all that with a fully integrated commerce and marketing system for restaurants and retailers. In this edition of UpTech Report, Ivan tells how the system works and how, as he claims, it produces even better results than Starbucks.
More information: https://www.spendgo.com/
Ivan is the CEO and Founder of Spendgo, a leading loyalty and marketing solution for restaurants and retailers. He is an experienced executive within the technology, marketing, and hospitality industries. Ivan is a firm believer that you start with customer experience and then define your solution stack from there
DISCLAIMER: Below is an AI generated transcript. There could be a few typos but it should be at least 90% accurate. Watch video or listen to the podcast for the full experience!
Ivan Matkovic 0:00
our best customers see 60 to 70% of sales go through the loyalty program. And to give you a reference point, Starbucks, one of the leaders is around 40 to 50%. And the industry average is around 5% of sales. So it’s just a huge amount of engagement that we get on our platform.
Alexander Ferguson 0:24
Ivan, I’m excited to be able to chat with you today and hear more about Van Gogh. And to start us off, can you describe like, what’s the problem that you guys have set out to solve it very briefly, five seconds where you are right now today.
Ivan Matkovic 0:36
So we’re really trying to solve for marketing for restaurants and retailers, we don’t feel like, you know, they have great solutions for that. And they’re spending a lot of money on platforms like DoorDash, to bring in customers.
Alexander Ferguson 0:51
So you want to help all those small businesses be able to connect and build those relationships?
Ivan Matkovic 0:55
Well, and big ones, too, right? So it really spans that same problem for everyone.
Alexander Ferguson 1:02
Your industry, then your vertical is on an on the real estate retailer side of those who are direct, retail and restaurants, retail and restaurants. And it’s building that customer relationship. So dig into more than how that technology, how does it work and move into case use case in play?
Ivan Matkovic 1:22
Yeah, so you know, great examples, a company called Zoom eatery, they’re, you know, soups and sandwiches chain out of the Midwest. And for them, the big problem is, you know, they’re paying 20 30% commissions to third party delivery sites to bring in customers. Well, why would you pay commission on a customer that belongs to you? Right? So what we come in is we provide a solution that says, Okay, well, your new person, you know, please sign up directly with Zoom, and we’ll send you deals and special offers, if you order directly with us, instead of going back to one of the third party platforms. And it’s really simple math, right? It’s I can pay a commission to a third party platform, I can give my customer a better deal. And the math just works out, you’re better off giving your customer a better deal for coming back to you.
Alexander Ferguson 2:15
Now, the idea of building that relationship, having that relationship with the customer and and owning them not having some other third party powerful. Tell me though, how are you guys different from other solutions out there, because there’s a lot of loyalty programs that pop up. So tell me more about how you guys are different.
Ivan Matkovic 2:33
I would say there’s really two different like main differentiators I like to focus on one is integrations. So we offer a ton of integrations. And one of the things that we have a patent around is we can actually integrate with any point of sale system. So 1000s of them anywhere around the world. And we can integrate with any of them. And if we haven’t seen it before, it takes us two weeks to do an integration. And we don’t require anything from the point of sale vendor to get it done. only ones that can do that, and can say that. And so that’s probably one of the biggest. And then the next piece is really effectiveness. So you know, I always tell people, there’s three main stats, and they’re all around customer experience, like like you said, you can run points programs with anyone. But with spangle, when you run a loyalty program, you’re signing up 12 to 20 times more people. And you just there’s no amount of AI in the world that can make up for the fact that I’m reaching 10 times as many people as Spangler that I am with another platform. The next piece that’s really big is our best customer see 60 to 70% of sales go through the loyalty program. And to give you a reference point, Starbucks, one of the leaders is around 40 to 50%. And the industry average is around 5% of sales. So it’s just a huge amount of engagement that we get on our platform. And then the last thing I like to talk about is 90% of rewards get redeemed on the spindle platform, right. And again, that compares to an industry average of only 40%. And when you think about that, I always tell people, your loyalty program platform, only 40% of people are using the rewards. That means you’re giving free money away to loyal customers, and 60% of them are saying no thank you. They’re just forget, I don’t want your free money. It’s too complicated. And you know, that just that, to me is something that platform controls and something we really excel at.
Alexander Ferguson 4:27
So if that percentage is low, that means whatever loyalty program you’re using is too complicated for customers even want to bother with.
Ivan Matkovic 4:36
And specifically that customer experience, right? So, you know, it could be a strategy issue, but a lot of times it’s also like, you’re gonna email me this 20 digit code that I got to go search through and find and bring in between two and 4pm and get it scanned in a mobile app that I don’t know where on my screen it is like it’s just not happening right. So we really eliminate all those problems I’ve really thought about as a customer, how should my loyalty program feel like? And that’s what we bring to brands who work with,
Alexander Ferguson 5:10
obviously, restaurants and retailers, they’re in a difficult bind this past four or five months? Yeah. situation. So how have you guys evolved and tried to help during this time? Yeah, so
Ivan Matkovic 5:23
we’ve really worked with our restaurant partners and retailers to move them online, right. So a lot of them have E commerce and online ordering stores. And we actually really early when COVID head said, hey, we’ll give away the online version of our platform for free for the rest of the year. You retailer, you merchant, get it for free, we want to help you out. And whenever you open your stores, right, that’s when you pay us. But while your stores are closed, we just want to help you keep your lights on. And that was something we did, I think two weeks into shutdowns. And our team moved really fast. It took a lot of sacrifice, like our actual team said, we’re going to take salary cuts in order to offer this to our customers. So it was really just, you know, not just me, but I had asked the team permission in order to do that. I think that’s just you know, the character of the folks we work with.
Alexander Ferguson 6:17
Now, your solution for online? How does that work? Or different than than in person?
Ivan Matkovic 6:23
Yeah, so online, it’s pretty simple. You just sign in with your loyalty account so that you don’t have multiple logins. And that’s it, it’s there in your shopping cart, and you just when you’re ready to checkout, you choose your $5 reward or your free item. And, you know, again, it kind of builds on top of that easy experience we built in store. And you know, we’re seeing great effectiveness from it. And again, you know, the math is so simple for someone who’s, you know, paying Commission’s to do anything they can get people to order direct instead,
Alexander Ferguson 6:58
help me understand a bit more about them the technology and you integrate with the different online.
Ivan Matkovic 7:04
Yep, so like Shopify is to go tag, Polo. Those are big players on the E commerce and online ordering front, and we integrate with all of them. And we have open API, so we don’t charge you anything for a new integration. And you know, it’s been working really well, for our brands, a lot of them have really weathered the storm. And I guess the good thing on the food side is, so like, people are eating less because of COVID. Right? So you can still rely on that. Maybe they’re not buying as many suits. But that definitely, you know, we didn’t stop eating so that that’s probably the good thing for everyone.
Alexander Ferguson 7:42
We just change on on how we get our food. Yeah, exactly. Right.
Ivan Matkovic 7:46
It’s more athleisure than than formal wear?
Alexander Ferguson 7:50
Yes, indeed. So this, your business model is it’s a monthly fee subscription is it based, so
Ivan Matkovic 7:59
we charge a flat monthly fee, per location and per account. And, you know, for us the way we’ve looked at it, it’s, Hey, if you’re getting more value from the service, awesome, we want you to get that. So we don’t charge you more because you’re more successful we want, you know, we want to align the incentive for you to actually grow your business and maximize the value of the platform.
Alexander Ferguson 8:23
An individual shop small mom and pop shop, if they wanted to use it, you could they could use it, or do you have a minimum?
Ivan Matkovic 8:30
Yeah, so we work with independent shops all the time, if you have one store, or if you’re only online, you don’t even have physical stores, you can use mango.
Alexander Ferguson 8:40
Now, obviously, it makes sense for those who have a lot of franchise, multiple franchises multiple locations that have standardized. Tell me though, what’s the pros of using your platform versus them building their own? Cuz I’ve seen, I’m in local places, I’ve been to Dairy Queen, whatever would use the local thing that I started promoting, then they built their own. And so it’s like, everyone’s start to build their own how, what’s the benefits of yours?
Ivan Matkovic 9:05
So a lot of times, it seems like they’re building their own, they’re actually buying a platform like us. So everything is white labeled and branded. So even some people that are using Spenco, you might not realize that we’re actually the technology powering their experience.
Alexander Ferguson 9:22
That’s fast. It makes more sense very
Ivan Matkovic 9:25
rare these days that people buy or build their own technology solution, especially if you’re a restaurant or retailer. There’s just so many options like Spenco to look at it’s really not worth doing it yourself.
Alexander Ferguson 9:40
So looking forward for you guys. What is the future at both in the near term next year? What are you planning on rolling and then long term? Where do you see it going?
Ivan Matkovic 9:50
Yeah, so our biggest focus over the next six months is just integrations partners trying to do more on the online and E commerce side of things. We feel, you know, adding as many features as we can there is what’s going to help the merchants the most and move the needle for them the most long term, you know, we really are looking at, okay, what are the best ways to enable contactless experiences on premise? Right? We feel like there’s going to be a permanent shift for at least a big part of consumer behavior towards, you know, using digital menus and paying on your own at the table. Right? These are things that probably would have happened anyway, without COVID. But they’re moving a lot faster now. And, you know, we’re probably going to see openings and shutdowns and various phases of in person service over the next few months, or a year potentially, but you know, after that people are just going to be used to things like why do I have to have my credit card to someone, they go away for 1015 minutes, and maybe they come back and you lose 1015 minutes waiting for the truck to come back. So you’ll things like that just getting digitized, we see as being the big next step. And we’re integrating with platforms like that.
Alexander Ferguson 11:07
For those that want to learn more, what’s a good first step that they can take? And where can they go to, to get it? Yeah,
Ivan Matkovic 11:13
best place is just to go to our website www.vango.com. We have a bunch of information there. We link out to videos that you can watch online. And, you know, we’re we’re a people company, so happy for you guys to reach out and talk to someone on our team. We’ll we’ll set up a live demo for you. Another option is you know, find a restaurant or retailer that we work with and you know, we one of our big customers is cold stone, there’s probably not a spot in the country that you’re not close to a cold stone that you can go try it out yourself with and get some ice cream, especially with the weather right now it’s not a bad option.
Alexander Ferguson 11:56
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