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Ibotta has offered cash back rewards on various products from different industries for more than a decade. Initially established as a program enabling users to earn cash back on their grocery and everyday purchases by uploading receipts to the Ibotta app, website, or extension, the company has garnered attention from brands due to its ability to enhance customer engagement and boost sales.
In response, the company created the Ibotta Performance Network, designed to help brands create and run promotions that drive customer engagement without relying on a traditional discount model. Through the program, brands build closed-loop rewards systems that allow customers to earn cashback they can redeem on future transactions with the brand.
Loyalty360 spoke with Chris Jensen, Chief Revenue Officer of Ibotta, about the Ibotta Performance Network, the company’s insights into trends in customer loyalty, and how brands can leverage data to build promotions that drive customer engagement.
Can you tell us a little bit about yourself, your current role with Ibotta, and your background?
Jensen: I’m the Chief Revenue Officer at Ibotta. I’ve been with the company for seven years and have spent my whole career in the retail performance marketing space, having previously worked as Global Marketing Director for Whole Foods and then founding a company in the space before joining Ibotta.
At Ibotta, I oversee revenue and operations with a team of 250 extremely talented individuals across sales, account management, operations, and analytics. Over the past couple of years, we’ve been working to take Ibotta’s powerful suite of performance marketing tools out to a much larger audience of consumers with the Ibotta Performance Network (IPN). We now reach more than 120 million consumers across retailers and third-party publishers using a pay-per-sale model and offer truly unprecedented scale for a performance marketing platform.
Can you share a “fun fact” about yourself? We always like to learn something new about those we interview.
Jensen: I have spent my whole career serving mission-driven companies. My time at Whole Foods inspired me to start my own company — Givella — which was a FinTech-based marketing platform that attempted to deepen the connection between brands and consumers through a unique nonprofit giving incentive. Eventually, we sold Givella to a European-based cashback company who was entering the US.
For those who may not be familiar with Ibotta or the Ibotta Performance Network, can you give us a brief overview of your company? What you do, how you do it, and the industries you work with?
Jensen: Founded in 2012, Ibotta is a digital cashback platform on a mission to make every purchase rewarding. Via our mobile app, website, and browser extension, shoppers can upload receipts and get real cash back in their pockets on everyday purchases. To date, Ibotta has paid out over $1.3 billion in cash rewards and has amassed more than 50 million downloads.
As we grew our grocery presence, non-grocery retailers also looked to us to help drive incremental sales to their stores in an efficient manner. We now work with over 3,000 retailers across categories as wide-ranging as electronics to cosmetics to travel. We’ve also amassed an unparalleled set of zero-party and first-party data that enables us to create stronger connections between our partners and our shared consumers.
The Ibotta Performance Network is our one-stop shop for retailers and brands to reach a wider demographic of shoppers in an omnichannel fashion. It’s a centralized way for our partners to drive incremental sales at scale within their target return on investment across a broad ecosystem of properties. We work with retailers, like Walmart, to create a closed-loop rewards system, which drives bounce back purchases and builds purchase habits, ultimately leading to increased loyalty. It’s also less brand eroding than coupons. On the brand side, we make it easy to run a program specific to the KPIs they’re trying to drive, whether household penetration, lifetime value (LTV), new customer acquisition, competitive conquesting, or more.
Something we always like to understand from our members is your definition of customer loyalty. How do you define customer loyalty, and what does it mean to your organization?
Jensen: We look at customer loyalty as consumers having trust that they are receiving quality, relevant products at a fair price, and thus choose to continually purchase those products over others. At Ibotta, we foster loyalty by inspiring new customers to try a brand for the first time, lapsed customers to come back to a brand, and existing customers to add another product from a brand’s portfolio to their basket. We do this by lowering the financial barrier to these behaviors and cutting consumers in on the deal in an advertising relationship. As I mentioned earlier, our goal is to make every purchase rewarding. We understand that consumers have hundreds of options to choose from on a daily basis, so choosing to be loyal to one means a lot to us and we want to celebrate that.
What do you think is working for your clients when it comes to building successful loyalty programs and strategies? Can you give an example or two?
Jensen: We see some great success when we implement a closed-loop reward system. Rather than coupons, which erode brand equity, slow down the line, and create value that can be redeemed with the competition, closed-loop rewards protect brand equity by charging face value at the register, don’t interrupt the checkout flow, and keep the value in the retailer ecosystem. But it doesn’t leave the customer by the wayside — it provides a real benefit via cash back they can put towards future purchases. Over the last year especially, we’ve seen how this closed-loop model really drives a virtuous, harmonious cycle between retailers and shoppers.
One example of this is our work with Walmart. Through Walmart Rewards, there are no digital coupons, just item-level digital offers to be used on future purchases at Walmart. When customers accumulate cash back within the app, they feel the benefit at checkout, and then again when they go to redeem those rewards. It’s double the dopamine, and it empowers the shopper to spend those dollars on whatever’s important to them, including offsetting the membership fee of the incredible Walmart+ program.
The Ibotta Performance Network recently launched a 3x Return on Ad Spend Guarantee. Would you tell us more about this program and how it can help brands with their marketing and customer loyalty efforts?
Jensen: The marketing and advertising landscape has changed dramatically over the past year. Brands are demanding more from their advertising and technology partners. Because the IPN runs on a pay-per-sale model, we’re able to ensure marketers know how their campaign is going to perform, even before we launch. This means no wasted impressions or clicks, and brands don’t have to bear the risk of underperformance. Cashback rewards provide an efficient and proven method to influence consumer behavior. The IPN can do that at an unprecedented level of personalization and measurement that delivers unparalleled value and results.
One of the top trends we saw in our State of Customer Loyalty research is that a number of brands are focused on redoing their loyalty programs and/or adding functionality. What are you seeing around program relaunches, or updates, and what are clients looking for?
Jensen: Thanks to inflation and price increases, national brands are having to battle private label brands for market share. They’re also starting to lap incredibly strong YoY comps, while in many cases seeing volume growth slow due to those factors. Brand marketers are under immense pressure to increase velocity, drive measurable, incremental sales, and do so with a constrained budget. That’s why we introduced our 3x ROAS campaign — we recognize marketers have an uphill battle to fight in terms of proving results. Providing a proven system with clear and compelling results helps make that hill a little less steep.
Another trend we’ve seen is around a “sea of sameness” within programs, where many loyalty programs or offerings look, feel, and function similarly to each other. Is this something you’ve seen, and how can brands address this?
Jensen: This is absolutely something we’ve seen. For example, most grocery loyalty programs are still built on the old one-size-fits-all, high-low program popularized by Tesco 30 years ago. These loyalty programs struggle to differentiate themselves, attract the best brand offers for their consumers, and maximize value for the retailer. We’re seeing the savviest retailers shift to a new paradigm where they provide cashback rewards instead of old-school discounts, which, as noted before, have benefits to the retailer, the brand, and the consumer. These programs also offer brands the opportunity to get in front of the right consumer with the right offer, the ability to connect offers with their retail media in order to drive full-funnel conversion, and the ability to measure every dollar invested. We see brands leaning into these programs, steering more budget into them and away from less efficient national media programs.
Is there a current trend, new technology, or idea you believe is the most important thing for brands to focus on today?
Jensen: There is something to be said about the psychology behind loyalty, including the importance of habit-building. Brands can get a shopper’s foot in the door by offering an incentive to purchase, but to maximize LTV the brand needs to keep that shopper coming back. By offering incremental rewards and continued incentives, the shopper gets in the habit of choosing that product again and again. The consumer builds a relationship with that product that drives him or her to continue purchasing and requires less of an incentive to make subsequent purchases — though brands shouldn’t forget to celebrate their most loyal customers, either!
What is one piece of advice you would share with brands looking to improve their customer loyalty or experience strategies?
Jensen: You need to better understand your customers and the performance of your marketing promotions and communication through clean, verified purchase data. Most brands are doubling down on their zero- and first-party data strategies in order to better understand their consumer, which allows them to offer more relevant products and marketing, increase portfolio penetration, and maximize LTV. This data is getting harder to come by due to loss of signal and much needed privacy regulation. Brands need to identify partners who can provide clean zero- and first-party data in a compliant manner — where consumers know exactly what they’re opting into — and in a manner that produces clean, deduped data on which the brand can action (OCR-dependent data collection is inadequate). They should also develop their own methods to collect this data, which include creating compelling incentives for the consumer to opt in.
What can we do as an association to help others focus on their loyalty and CX in their journeys?
Jensen: Sharing new ideas and insights is so important — innovation isn’t possible without it! We are always open to chatting about best practices and strategies with anyone who is interested, and often host roundtables and webinars where industry leaders can exchange ideas and learn more.
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