#8: What Antavo Learned Scaling Loyalty Programs for KFC and BMW

Zsuzsa: Everyone. I'm Zsuzsa Kecsmar, one of the co-founders of Antavo that is a software as a service platform to run next generation loyalty programs. I'm in the Messy Growth Show now, and today, we are going to talk about our entrepreneurial journey, how to build a SaaS company, and what are the challenges that we've overcome in the past. 10 years to build this hundred people company that we are today.

Soren: Welcome to the show Zsuzsa we are very excited to have you on the show today we really want to take off, on a little bit of background on what is Antavo and what problems do you solve, and for who.

Zsuzsa: Excellent. Yes. Thank you very much for having me. Antavo is a loyalty management platform. It's a software as a service product, and help brands and retailers and big companies like KFC or BMW or big pharma companies or airports or global fashion houses to run great loyalty programs because, Loyalty programs could be so much better than most of them are today. So this is what our mission is. We are a hundred people today. And yes, indeed I was. So, we co-founded, this company a bit more than 10 years ago. And one of my co-founders was my husband actually is my husband because, you know.

Christian: Still is.

Zsuzsa: It's Still working.

Soren: What other particular, so if starting a new business is not hard enough and not strenuous enough and not spread yourself thin enough. You did it, as a couple too. So how do you manage to just briefly keep that, distance and what is private and what is, working hours.

Zsuzsa: Well, that's a very interesting question and for the longest time we were practicing and eventually we are still practicing, but we make it work. So we are four co-founders and two of us is a couple. It's not only the two of us, it's not a family business in disrespect. It's a venture funded serious company with multiple co-founders and stakeholders. And eventually, while the CEO is my co-founder. I'm the Chief Strategy Officer, and then we are a couple. And, the interesting thing is that when we started off, we were dating for like five months and I spent that five months in a different country. So we didn't quite knew each other. We just trusted that it'll, like, it'll work out, we just go with the flow. And then we ended up not only going with the flow, but. Building a product, bringing it to market, fundraising, hiring people, and now we are here 10 years later with a big team, now, a big family. We have three kids and we make it work. When someone asks this question to me like, how do we make it work? I usually, Tell them that it's three things that we do. The first is cre clear roles. The second is appreciation for the other person, and the third is all the, all the help that you can get. Clear roles. Roles are important because you don't want to stop on each other's toes too much, even though it's very difficult when you are a small team. But certainly everyone needs to have their own expertise, their own field of expertise. That they own. In our case, the four co-founders was myself as a marketing person, our co-founder as a salesperson. Our CTO is a technology person and our CEO who was, who actually have done all these three things as a generalist entrepreneur who've already built his agency before, but he wanted to get outta the wrath of being an agency. So these clear roles are very important. The second thing that I said is about appreciation and, I just really admired the person that he has become. He's a CEO of a hundred people company and I love the person that he evolved to be, and I know that he also appreciates the person that I've become to. And we tell this to each other very often. We just really like to, you know, praise each other because it's good for you and good for the other too. And my number three, like getting the, all the help that you can get. They say that it takes a village to raise a child. It takes an even bigger village to raise three kids, pastor, grow a company. So I often tell myself that in my personal life, I should be inspired from my professional life. So how I would project manage it, how I would assign tasks. So if you can get, if you can get all, like for example, the household help that you can have. Early on we didn't have much help from family or other support, but now we do and it takes so much weight off our shoulders.

Christian: That's a very good point because as a founder, especially early stage, you so many hats on. There's so much stuff to do. So just removing the task of emptying the dishwasher or cooking dinner or can suddenly release some time to spend with your husband and appreciate each other. So sometimes seen in other companies that, if there's a spouse that is also hired in the company, then employees don't necessarily wanna be fully transparent, how have you, the employees basically dealt with the situation that you were in a relationship.

Zsuzsa: Well, I'm not sure. I didn't know, you know, because they didn't tell. But, I think so far we are okay because we've got this far. If we were not okay, then we could have failed earlier. So I'm sure that there were, people were thinking things, but we were eventually able to come through them because we are here today.

Soren: When we take the examples of KFC or B m w, some of the bigger customers you have today, what is it that, what challenges was it that they had before running a loyalty program? What was it that they couldn't do? Prevented them from investing further into loyalty program, which is now possible with your solution.

Zsuzsa: Loyalty programs have been very similar in the past decades. It's really about earn and burn. Like, spend a dollar, earn a point. Basically that is a loyalty program. It's very similar to the STEM cards that you can get in a coffee shop. But what is the next level from this? Because this is what we know, but what is really how loyalty programs can be, should be today when technology allows us, This is what we created with Antavo, because with the loyalty programs managed by Antavo, you can't only reward Transactions. So the earn side can be much more, you can reward positive behavior. You can reward working out, you can reward if your customers go and go hiking. One of our customers is, bird Site, the German Mountain, their retailer, and their loyalty program is connected with Strava and Strava can track your movements. There's also another tool and another app, Vertical Life, which is especially for climbers. And in their loyalty program, they reward if you go out hiking or if you refer friends or if you leave reviews. So there are this whole new word that you can reward beyond purchases. And that's true for the other side too. The burn side. When you reading rewards, spend points, or even not points, because today it's possible to run loyalty programs without points. So these, instead of coupons, these could be experiential rewards. Participation in special v i P groups getting early access and we are the technology behind this that makes it, makes it happen.

Soren: You are able to help them track Other behaviors that they were not able to track before and decide what they wanna do with them.

Zsuzsa: Exactly.

Christian: I was running a pretty big loyalty program in a SaaS company, and I remember one of the biggest challenges was. Not so much like coming up with all these like, different challenges that we could make for the users of the tool, but it was more the whole activation part of actually getting, you know, keep communicating. Now we have a new challenge, like for example, this go on a hike or, participate in this, research group or whatever. Like, have you found any good ways of dealing with like creating this engagement with.

Zsuzsa: Yes. And then you touched an amazing point because that's an industry-wide problem that you're talking about, because today how the industry works is If you created a loyalty program, you just don't touch it for the longest time because it's so complicated to create it. You wanted to create something, you ended up with something, but you just don't want to touch it because you are afraid that it'll break. And we want to change that. And the way we can change that is that, it's easier to add new things. It's easier to adjust a loyalty program, so it's, it can be truly part of your marketing funnel. It can truly be a part of your, month to month activations, because a best practice is to start with an M V P, just like instr, a service and M v P loyalty program, and you add things to it iteratively over the course of the year, years, and so on. It's a great practice and it's a specific need that The loyalty program industry is not as mature as C R M or marketing automation, and we are bringing this change into the industry. So loyalty programs can be more flexible and adjustable.

Christian: Test testing things out, see what works, and then change direction if it didn't work or, okay.

Zsuzsa: Like adding functionality, adding more and more functionality.

Soren: How do you, how do they actually communicate with their prospects or customers so that they can communicate, these reward programs? Is it in app or how does that dialogue and communication run that engages them.

Zsuzsa: Yes. Well, KFC is an amazing example. It's the KFC rewards arcade, and actually it already won three awards this year because it's such an amazing loyalty program. And what makes it amazing is the constant behind it. It's actually quite a difficult part of our business that the success of our loyalty programs or the loyalty programs that are managed by Antavo are dependent on our customer and on their concept. That is figured either by an agency or the customer itself. But in this case, in KFC's case, it was an excellent concept. It is an excellent concept because it builds on the fact that they didn't want to engage those customers who are already loyal. But they wanted to turn those customers who don't buy that much to recurring buyer's. And the way they've done that is that they created a mobile app that builds, on basically raising a right, having like it's built on creating craving in you for chicken. Because this is how we think of KFC, oh, we crave some chicken from KFC and KFC identified that. And with the help of gamification, now they have this whole rewards arcade experience. Like you want to play with that app. And while you want to play with that app and you play with it, you receive this small incentives, small gifts that you can use to your next purchase. So basically this is how this very engaging app, this gamification drives. Customer behavior change. So you would actually buy that next, chicken order at KFC.

Christian: I guess you didn't start having KFC as a customer 10 years ago. So I'm curious about, how you kicked off getting the first customers. That's a huge struggle for a lot of SaaS founders, just getting those first 5, 10, 15 customers.

Zsuzsa: When we started off 10 years ago, Antavo was a different product. It is based on, so Antavo was, a software as a service to run contests and sweepstakes for small businesses. So it's different in terms of what the product is doing because it was contest and Suite six. Now it's loyalty programs and it is different in terms of what, it is who was doing it for. So we've done it for small businesses, but we do this for mid-market companies, enterprises, you know, more developed companies. We thought that it's just a small change in the product, but then it turned out to be slightly completely different. It's this visual thinking from our side, thinking that.that it's very close because it's not close at all. And, we've had so many small customers back then. Already at one point, it's this 40,000 marketeers who used Antavo, But we had this terrible problem with churn. So every single month, 30% of our customers left us. And then it means that in one quarter, basically you have all your customers going away, maybe coming back. But see, they used it in a seasonal way, and we knew that we wanted to have a product that is not used in a seasonal way, so you don't need to market and remarket to them all the time. So this is why we changed to the new product concept. And with that, our very first customer came through a partner. That customer was Luis via Roma, who are customers since 2016, which is a luxury fashion, marketplace based in Italy. They're global, and they came through a partner, Hoover, a partner with the old, platform too. That platform is Amorist, a marketing automation company. So this is how we got our first big customer, and after that, the address followed.

Christian: What did you do with those, 40 k, customers? You just let them. Like not work with them and just turn away over time.

Zsuzsa: Exactly. This is what we've done because they were small businesses and entrepreneurs. Basically those who wanted to run these contests in sweepstakes, which were very fun back then and working in the early days of Facebook. But then also Facebook went i p o and then, and then the contest in sweepstakes disappeared from Facebook. If you remember now, we don't have those since they started advertising in 2015. This is when this word turned around with us and we knew that we need to do something different.

Soren: Was it the same brand on Antavo before and after?

Zsuzsa: Yes.

Soren: You could argue that you spent the first years with that platform as branding and then you sweep your solution and then you got the right product. Because just having one big customer is not the answer to everyone, for.

Zsuzsa: Yes. Yes. Sure.

Soren: So, it was a major milestone for you.

Zsuzsa: Yes, you can say that. So it is already an established company. It's already people in the organization. One be made the big pivot.

Christian: That's also been a huge change in your, in your whole go to market strategy, because I'm assuming with the 40,000 customers, you were very inbound. Driven or maybe just like paid advertisement to just keep them coming in versus now where you are more account based, focused. Instead of getting those big K f C level enterprise customers.

Zsuzsa: End, you know, it's like much less customers because it's a different game. Today half of our customers are coming inbounds. They find us through their research because they read about us in reports. They read about us because they were trying to find their answer to a specific problem, like how to do this and that with loyalty programs, and they've done so much work in building the global knowledge around loyalty programs all over the world. This is one of the sources. The other source is partnerships, which is something that partnerships really wires through our whole organization. Whatever we do with marketing, it's always better with partners. We just do everything with partners. We put them into the spotlight. We author advice, we refer them leads, and of course we expect leads too because they need us to realize their plans. Our best partners are those strategic strategist agencies are figuring the loyalty concept for brands and retailers and, those implementation agencies. Who have a lot of engineers and they wire things together just like there's Salesforce certified agencies all over the, there are Antavo certified agencies all over the too. And the third type of partners that we have is technology companies who are around us in the marketing space, like C D P marketing automation. Because we integrate with them, we connect with them, and oftentimes if there's an R F P, they want to change their systems. Together, so we go hand in hand with them.

Soren: Was this partnerships that you had targeted from the beginning or did you realize that these were partnerships that be beneficial to you.

Zsuzsa: We knew nothing at the beginning like we were. We were very blind, we were ignorant. And then of course, this turned out over time that this is how this word works. So, yeah, we saw them in deals. They reached out to us and this is when they realized we mapped this industry basically.

Christian: If you should give like a few tips to another SaaS founder on how to choose the right partner? What would you be looking for?

Zsuzsa: I think the best partners for your sauce company are those companies who are one step ahead in the process. So in our example, when launching a loyalty program, that loyalty program needs to be like figured out in terms of strategy. Like what about the points and tiers, what segments and stuff. That whole strategy needs to be figured out and they are one step ahead of us because first, they need to have the strategy in order to choose the technology. So our best strategy is to connect with those who are one step ahead of us. They need us to realize their plans, and usually they're the ones who are writing these RFPs, request for proposals, which is basically a public tender for companies to apply and then submit their response to the technical requirements.

Soren: If you, if you should give us a short story on an Antavo and at what point did you feel that you had the right message, a clear understanding of who was the right fit.

Zsuzsa: Yes. It's, interesting, such an important question because we've been, I think, at all stages of the process. So when we started off with Antavo loyalty product, it says Antavo loyalty programs for fashion. Because from Oma, our first amazing customer, we started to have more customers in fashion. It's amazing. And we thought that, okay, so then our USP is our attention. This our special attention to the industry. So from loyalty programs for loyalty platform for fashion, we expanded to loyalty platform for retail because as for fashion, we started to have more customers. Then what is the joint common denominator then? Okay, it's retail. So it's retail. Then. At one point it was so many e-commerce companies that we thought that it's e-commerce. But no, we didn't want that because our best loyalty programs, when it's omnichannel, so now it's Antavo Enterprise Loyalty Cloud, so it's a cloud. It's for bigger companies, even though if they're not enterprise, they aspire to work like an enterprise. So we left the industry messaging and we just went with technology. This was the evolution of our messaging. Basically.

Christian: The one you have right now? When I saw it at first, I was like, wow, you're going for like developers. Like it was like API, no-code, stuff. I was like, damn, who is this? Is that for the developers? But, it was, it was an interesting angle in the, in the marketing space going for that messaging.

Zsuzsa: Yeah, actually. And, that's a work that we've been focusing on for a while now, that not only talking to one persona, but to multiple personas in the decision making process. So there is one persona with the loyalty program manager or the C M O who is in the marketing side, the business side, but there is also the other side, which is the technology decision maker, be it the product owner, be it the CTO. We need to be relevant to both of them. And they are very different kind of people. One may think that this is marketing bullshit, you know, I don't buy it. And the other thing is I have no idea what is this saying. So basically these are the two kinds of extremes that we need to navigate to.

Soren: Now we talk a lot about sass, but, this has of course, analogies and practicalities and parallel to any line of business in terms of how we communicate and how we focus on partnerships. So I find your message here equally important for example, manufacturing or more people who actually ship products. As well that you have this understanding of who your audience is and how you communicate to 'em. You started to communicate very niche specific fashion, online fashion retailers in the beginning because that allows you to get in and be easily recognizable by the audience you want to get in because if you go too wide in the beginning, won't have the logos on your website. You won't have the cases, and you won't have the revenue to support you. Trial and error of changing your message to more enterprise as you go ahead. At what point in the journey did it give you the freedom to actually become enterprise wide and talk about all your partnerships and the ability to Handle and support all these different key players in your, in your pipeline.

Zsuzsa: Well, I believe it was through struggles. You said that it seemed like so easy, no struggles and stuff like it was definitely struggles. And struggles are always uncomfortable and they are always a sign. So what is the struggle really? It's like not enough sales, not enough new customers. Like there is like bottlenecks somewhere in the funnel, or you have problems with actually servicing these, or there is a specific need of a specific kind of company that you just really so difficult to solve. So basically from this, like an evolution, a teamwork if you like, when you figure it, what's next? And so many times, Companies were falling in love with Antavo, and they were asking us like, can we do this and that? And then when we say yes, when we develop the product, and it is always our strategy to develop the product and not to do custom development, it's tiers you into a direction, right? So this is how you evolve the product and this is how you evolved, actually, the target customers.

Christian: It is a question I had from a founder very recently, which was like, you know, which features should I basically develop? You know, and basically figuring out the whole product roadmap. And in what I hear you say is that you didn't let the customers sidetrack you into like small spikes here and there, but that you created features for like the greater good of your customer base. So were you just being. Like super visionary area around where you wanted the product to end up, or how were you like steering the direction of the product where, it should be today?

Zsuzsa: New customers definitely influence where the product is going and is going because when we do these product releases, at least do, since 2018, every single quarter we publish a product release. Definitely customers and your customers play a very big part of what we develop. We don't do custom development. We don't want to do these. What you just said is like, take these exceptions, but we want to build everything into the product because we focus very much on not to be an agency or an agency tech mix that sometimes we see on the market, just in the previous quarters. In the product releases, we released functionalities around B2B2C loyalty programs, coalition loyalty programs, umbrella loyalty programs. These were all kinds of like special loyalty programs, you know, that came from different industries, different companies set ups and needs. So we are definitely following our customers, but in a smart way.

Soren: You have different tiers of your product How you differentiate your, offering and the price for smaller customers versus big enterprise and.

Zsuzsa: Our solution is I think, quite nice and quite unique because we are on the same side with the customer. It's not like if you use more features then you should pay more, but it's like, if you're successful, then everyone benefits. We want to make you successful. The way we achieve that is that we price based on the number of active loyalty members. So basically you can use the old functionalities and our pricing is based on the active numbers, on the, on the number of active loyalty program members and the more active loyalty program members you have, the better for you. So it's like a key K p I for O loyalty program owners.

Christian: Have you been using that pricing, model the whole time or that's been a development process.

Zsuzsa: It is been a development process because we used to also price based on the features, but it was then why are we holding back? Why don't we give them this and that? So they would be more successful. If they're more successful than of course they will want to stay customers. So eventually we just Okay. Send it. You can use it to knock yourself out. And we will, price based on how successful you are. Of course there is an estimation needs to be done in the sales process, and our sales people do that estimation. And then we gradually, help them to have all the available, active customer allowance that they can have. Switzer ongoing communication. But we still think that's the best that we can come up with. There is also an opportunity to price based on the services that you give. Like if you have like super customer success or like basic customer success, what is the level of help that you'll give as a company to your customers? That's also a way to do the pricing.

Soren: Conventional belief of what works and what doesn't you feel that you have succeeded with that others in the general dialogue or online is saying, that doesn't work anymore. You can't do this anymore.

Zsuzsa: There was a time when everyone said that US is starting to founder need to do things that scale. So find a thing that scales and do that thing that scales. And then it helps you to involve other people to invest more work. It helps your investor to identify okay, so this is what I need to pour money into, and then you grow. But we never found that true really, because there are so many things that we've done that don't scale and we need to do these things in order to scale. So for me, it's kind of stupid advice to do things that scale because The advice that I'm giving to others and myself, do things that do not scale to you. If that means that you send messages to individuals and you remember that they had this need like a year ago, and now there is something that is relevant for them, then send it to them. This is how building relationships work, and after all, we are all humans. You are a person. You are a person. I'm a person. And people buy from people, and just really hard to do that at scale.

Christian: What, would be the advice you would be following or to another founder starting a business, in terms of nailing that ideal customer? The market, the channel. Like, well, where, would you, advise them of direction.

Zsuzsa: I think my biggest advice would be like, start charging as soon as you can unless you're, you know, chargey, bt, because then you can have everything over the board make a lot of money, even though if you introduced, payments bit later on the road. But I think we took too much time without actually having pressing in place. And then people may be were users, but they were not customers. So I would say have something solve the biggest problem. Now you can build an entire business around it too. Yes, and it can come later the services and stuff, but charge start charging as soon as you can. That's my biggest advice. If customers do not become customers that maybe you are not solving a problem big enough that they want to pay for.

Christian: The conversation changes a lot when you ask for the credit card. 'cause then you get the real objections and it's like, oh, this was just like a soft need and not really a hard need.

Soren: I'm sure your churn rate is down to an absolute minimum. Now, that brings you all smiles.

Zsuzsa: Yeah, I can't complain really about it. Fortunately.

Soren: Your company is today. It's much more partner driven and less outreach if there's still some inbound in terms of people researching and looking for how to solve their loyalty programs, mainly partner driven and some inbound.

Zsuzsa: It is mainly partner driven and inbound. These two are equals in our eyes. What have, what we've tried and never really worked is like direct reach outs and advertising. Interestingly, we tested this like thoroughly, really all are smart, but they didn't work out because it's a very special stage in life, in a company's life when they want to launch a loyalty program or re platform loyalty program, we just really don't want to hear about it if they don't have the need. So we needed to use as strategies to make them understand that they have this need and we have them, we have their back if they have this need.

Soren: What I hear when you say it's mainly partner driven and mainly inbound driven, is that you use those two channels, have an indication that you actually meet the prospects when they voice their need because they don't go to a consultancy if they don't have a need or any of your other partners.

Zsuzsa: We have pieces of contents, like months of reading on the internet, on how to run a successful loyalty program. What are the best KPIs for your loyalty program? How to create a budget for your loyalty program. How can I calculate the R O I on my loyalty program? What is the difference between umbrella and college loyalty programs? What tiers are for? And then I can, you know, tell like four times this topics. That we educate the internet on. We sprinkle this wisdom because we are really great in, you know, loyalty programs. And they see our name, they see us as experts. This is how they come to us.

Soren: Have you focused on, some people give this a boring name, like s e o right? But it's content writing. And you have not only kept this content on your own platform, but I imagine that you have sprinkled this all over all kinds of related, contextual media sites where your audience typically spent time on reading and researching.

Zsuzsa: Yeah, it's a decade of work.

Soren: A decade.

Zsuzsa: A decade.

Soren: I think this is worth mentioning because doesn't happen in a year or two or three. It's, it takes time to build this, representation on online with this kind of content.

Zsuzsa: Yeah. Maybe spart. People could have figured out it earlier, but it is the key for us.

Soren: Alright, anything else you want to add?

Zsuzsa: I think nothing really. I'm just thankful for you to help, you know, those who can help solve the big problems of the word With software, I'm really believing in that. Like it's a very nice space. It's a space with the great growth potential. And what you do is show that how it is soft and not linear, but in fact messy.

Soren: Where can we, what you have spent 10 years on distributing content on, loyalty programs. Is there a, what's the best place to start and where can we find out more about, Antavo? Specifically on the antavo.com, I presume, but where is the best place to start for us who wants to know more about loyalty program and become more knowledgeable on that?

Zsuzsa: Well, it's really on table.com, so you said it already. We have a blog that we update weekly, and we have like all our knowledge on that blog. We also send this, weekly newsletter and, we have these readers who are readers for the longest time, like long years. We sometimes chat issue, hit reply. I also receive that email. It's just a really nice relationship between the readers and us. We have, you know, very big and very small consulting companies all over the virtual and travel partners, and we just heard it last year, which I would really like to remember, because it's such a. Flattering thing that they said that like not please for the sake of all things, glory, use other sources than Antavo, too. Not everything could be Antavo because they use our website as a reference our blog article as a reference. So definitely antavo.com if you want to be educated around loyalty programs and if you have a need for an actual technology, a loyalty software to manage your loyalty programs, then we're happy to help.

Soren: How can we connect you.

Zsuzsa: Can connect with me on LinkedIn too. I'm quite active these days. And, I talk every day about loyalty programs. You know, that's my secret passion, not so secret because I talk about it every day. So it's a LinkedIn then.

Soren: All right. We thank you a million for taking the time, wish the best for Antavo going forward. I know you are very much in the media on now, also in tv. In general, which is where we saw one of your shows. So we really congratulate you on your success, on your long, overnight, 10 year journey,because we just, we experienced when the success arrives. Oh, these all new, but it took 10 years and a lot of, stumbling in between. So Zsuzsa, thank you for taking the time today. We really appreciate it.

Zsuzsa: Thank you very much for having me. ​.