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Get to Know Leaders in Loyalty | Petco, Andrea Mathews | Q&A

Having A Dog-On Good Time In Loyalty

"I like to say I accidentally fell into loyalty, and I never left," says Andrea Mathews, VP of Customer Engagement and Loyalty at Petco.

Mathews started her career in consulting on the project side, working with clients on learning, training, and customer experience and bringing those systems to life. She then joined Harrah's Entertainment, which had acquired Caesars and Horseshoe. They had found themselves with three loyalty programs and systems to combine. They loaned her to that team for the project, and she never left.

That's where Mathews learned all about relationship and loyalty marketing. She explains how Harrah’s/Caesars was so sophisticated in their approach, and she soaked all that in during her eight years with them. "By the time I left, I was running their loyalty program, the credit card, the partnerships, and all the things that came along with it."

Mathews now finds herself at the brand anyone with a pet has heard of– Petco. As the VP of Customer Engagement and Loyalty, Mathews uses her experience to ensure long-term customers, human and the four-legged kind, are being met with an experience that is personalized, educational, and easy.

It’s Where The Pets Go…And The People Too!

Q. What is the Petco business model, and how does it align to your top 3 business objectives when it comes to loyalty for 2022?

A. " At Petco, our vision and purpose are all about improving lives for pets, pet parents, and the people who work here – we call them partners. When you think about how to do that - how do we help our pets be healthier and live longer? How do we help make it easier for their parents? Loyalty plays a direct role in that.

It goes from the value we're providing by making it more affordable or accessible through rewards earned on every purchase, to personalized help like care reminders in our app, and personalized recommendations, education, and tips on what to look out for when your pets need care. These are just some of the benefits of our loyalty program.

By doing that, we're driving long-term value and retention of our customers. We've also instituted a premium element of our loyalty program. Our Vital Care membership program helps you care for the whole health of your pet, and pays for itself."

Q.What are the challenges you see in loyalty for brands that just want to get it done?

A. "There's short-term loyalty, there's long-term loyalty, and there's a short-term expense to running a loyalty program, and there's long-term value. If customers or clients just want to get something done, sometimes they sacrifice some of those long-term drivers for immediate return. That can make you more of a discount program without the things that customers are really looking for. Of course, they like the value, but how do you go beyond that monetary value? How do you tap into experiences? How do you help them, make it easier for the customer? If you're not willing to invest in some of those things or think it out, you may end up running a lot of discounts. You may become a program that doesn't drive loyalty but provides a discount to a customer."

Q.What's one commonly held belief that you passionately disagree with in the loyalty space?

A. "Some companies that either haven't provided the data to show a loyalty program's value or aren't as familiar with it can see loyalty as a cost center. It can be seen as a cost of doing business versus an actual driver that you can tap into. And I think that's true when a program is not done well, for example, in that discount case. When it's done well, it can be a powerful tool to engage with your customers and help drive transactional loyalty and emotional loyalty with the brand."

Q. What's one thing in the loyalty space that everybody should stop doing right now?

A. "I think the broad-based 'every day is a new discount' isn't really differentiating the brand. It's lowering everybody's ability to play, so everyone just has to match the other person, and everyone's margin is paying for it. I think you're training customers to expect it. If everybody paused on that, we would probably all be in a better place."

Q. What's one thing everyone should start doing in loyalty right now?

A. "Start with the customer; what does the customer want to know, want to hear about, and want to receive from you. You also need to start thinking horizontally as a company. Some companies see loyalty as a vertical that sits on the side of their business, but the power comes when you see it as a horizontal that helps every aspect of the business. That's how you get groundswell to make the program impactful in an organization."

Q. We hear a lot about the 'holy grail' of personalization to engage with members or customers. Where do you think you and your peers are on that journey, and how would you grade it?

A. " I am excited about our progress on that journey here at Petco. When you think about our pet parents and their pets, we have a wealth of information that helps us customize our interactions. So, in particular, in the email channel, we've made a tremendous amount of progress. Where our opportunity continues to be realized is how do I take that beyond the inbox? How does that message follow you and support you whether you're talking to a partner in one of our pet care centers, online, or in our app?

It's connecting that experience for the customer. But within the inbox, we're supporting your pet's life stage with education and support for transitions from bringing home a new puppy, to that puppy becoming an adult, and eventually, a senior pet. They have different care needs. So we’re going beyond the transactional to really partner with and help pet parents when they need it most. It's pretty exciting to see that come to life.

We have millions of variations running for some of our campaigns because we have so many different pet types and an ecosystem of opportunity for parents to tap into - we're meeting them where they are."

Q.What's your opinion on the role of MarTech and how it allows the industry to take advantage of personalization?

A. "It's hugely important. If we were to try to do this without technology, we would be nowhere near where we are. First, we had to get an ESP or a marketing platform that could actually do some of the things we wanted to do. For us, that was Salesforce. We then brought in some external help with Jam, who knows how to combine creative, data and technology to build highly personalized, dynamic modules for us.

Now to take it to that next step with multi-channel coordination, more connectivity is needed. Particularly when your channels are running on different platforms, this can be difficult. At Petco, we took a half step to start with email and our app. We aligned on the strategy, logic, and messaging, and then built each separately. The next steps is to integrate those into one system, so we only have to build once, and the channel coordination can be based on each customers’ engagement. It creates a seamless, more real-time experience."

Q. The complaints that I often hear about personalization are that it comes down to a data problem, a data science problem, or a scale problem. Do you think it's one of those things or something else, and how would you solve for that?

A. "It depends on where you are and where your organization is. I see them as building blocks. Step one is, do you have the data? What do you know about your customers and how can you contact them? Once you have that foundation in place, then comes step two: Do you have insights, audience criteria, or data science to inform your approach? As that comes together, you can start small to test and learn before you get to step three: How do you scale?

When I joined Petco three years ago, I would have said it's all three. We've since brought in a lot of expertise. We’ve made huge progress creating a 360 view of our customer and their pet family; and we built out a data science team, so we now have a lot of predictive models that are helping us advance. Now we are now at step three. I’m excited by the progress we’ve made thus far, and confident in the roadmap in place to bring the work to scale.”

Q. How do you measure success for your MarTech stack?

A. "We look at a few different elements. From a channel standpoint, what's the efficacy of the channels? From a campaign standpoint, we look at the performance of the campaign. When you examine the technology on its own, does it have the capabilities we need today and for the future? Is the money we're investing in the technology being harnessed and giving us a return? Can it scale with us and grow with us as we grow to become more sophisticated."

Q. How do you define loyalty at Petco? Where does it sit in the organization, and how do you see your role in driving that?

A. "There are several definitions of loyalty at Petco. There's big L loyalty, which is about the customer and their affinity to the brand. I think everyone at Petco owns a part of that because whether that's our pricing, our product mix, the customer experience in our pet care centers, the programs, or the marketing we create, everybody plays a role in driving and building that loyalty with our customer.

From a program and engagement standpoint, we sit within marketing. We're focused on not just the program and the published program benefits, but from a personalization and CRM standpoint, we consider who are the right customers to be engaging with, what the right messages are for those customers, and then ultimately, what the right channels are to get in front of those customers. "

Q. How do you see the role of offers in making deeper connections with your customer base at Petco?

A. "I think offers have a role in our ecosystem. It’s important to find offerings that can tap into emotional needs and connection, creating even more relevance for the customer and a differentiator for your brand. When we can deliver a personalized offer, like our complimentary Whole Health Check for your pet, pet parents appreciate receiving something relevant and through that visit can build a deeper connection with us. "

Q. If you could ask 100 of your peers in loyalty or marketing one question, what would it be?

A. "I would ask them, "what's next?" because loyalty needs to continue to evolve. We need to continue to stay relevant for customers and relevant for businesses. What is the next evolution of loyalty? I think staying innovative is just really important."

Q. What's the most important KPI of all?

A. "I would say for the long-term, it’s CLV. But I do not believe there is only one important KPI. CLV is the outcome of several other KPIs - revenue, margin, brand advocacy, program engagement, share of wallet, etc. It’s important to identify the key actionable KPIs for your business, and through those actions, you can influence customer CLV."

Q. What's your loyalty team's biggest challenge in 2022?

A. "We have some exciting projects coming up. I think continuing to have the time to drive innovation and evolution while maintaining the day-to-day and getting the support we need can be a challenge. I often say loyalty teams cannot do it on their own. So together with IT, product, finance, marketing, partners and customer care in our pet care centers, it takes a village to do loyalty successfully. Ensuring that you have the resources and prioritization across those teams can sometimes be a challenge for teams."

Wasn’t That The Cats Meow?

Mathews is set out to innovate and ensure she’s building loyalty elements that meet all Petco’s pet and parent needs. She also understands that loyalty doesn’t just sit to the side or sit alone with a brand. In order to meet your customers where they are at and build long-term relationships, customer loyalty always has to be top of mind, for the entire organization.

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